Using Currency Futures and Options Capital Crystal Inc. is a major importer of crystal from Germany. Every quarter, Capital needs DM500 million. It is presently attempting to determine whether it should use currency futures or currency options to hedge imports three months from now, if it will hedge at all. It has been very accurate in its previous forecasts of the mark's value. The management style of Capital is very risk-averse.
Managers receive a bonus at the end of the year if they satisfy minimal performance standards.
The bonus is fixed, regardless of how high above the minimum level one's performance is. If performance is below the minimum, there is no bonus, and future advancement within the company is unlikely. Offer your recommendation and justify it. Justify your recommendation.