Hedging Strategy for ABC Corporation's Euro Revenues

ABC Corporation, a U.S. manufacturer with significant exports to Europe, is facing currency risk due to the volatility of the euro (EUR) against the U.S. dollar (USD). The company generates €5 million in revenues annually, with a current exchange rate of 1.15 USD/EUR. To mitigate this risk, ABC Corporation is considering various currency hedging strategies, including purchasing euro put options and entering into a forward contract for the expected revenue.

In evaluating these strategies, the CFO of ABC Corporation is particularly concerned with the potential impact on cash flow, flexibility, and cost of the hedging mechanisms. The CFO is also analyzing the implications of potential adverse exchange rate movements and wants to ensure that any chosen strategy effectively locks in rates or protects against downside exposure.

Which of the following hedging strategies would best allow ABC Corporation to hedge its euro revenue exposure while maintaining some flexibility in its exposure to potential upside in the euro?