For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the call option holder should __ the call? a. exercise b. not exercise
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For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the call option holder should __ the call?
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- A put option has a strike (exercise) price of $0.82. If the spot exchange rate is $0.79, the put option would be ________. A. out of the money B. in the money C. at the money D. at a discounta) Assume that call currency option enable to buy of dollar for Shs. 50.00 while it is quotedat Shs. 50.70 in the spot market, and premium paid for call currency option is Shs. 1.00.a)Calculate the intrinsic value of the call? b) Discuss the value of hedging to a firm.2. Suppose the exchange rate of euro at current spot market is $1.25/€. If a call option has a strike price of $1.28/€ then we can say this option is a) inthemoney b) outofthemoney c) atthemoney d) past breakeven 3. Suppose the exchange rate of euro at current spot market is $1.25/€. If a put option has a strike price of $1.18/€ then we can say this option is a) inthemoney b) outofthemoney c) atthemoney d) past breakeven 4. According to our class discussion, suppose a U.S. based real estate developer is participating in a bid competition for a land in London. What of the followings can provide the best protection when Pound is expected to appreciate a) Call options b) buy futures c) sell forwards d) buy forwards 5. Which of following activities dominates foreign exchange transactions a) multinational corporations buying and selling foreign exchange b) importers and exporters buying and selling foreign exchange c) banks buying and selling foreign exchange d)…
- If the exchange at time t is Et = €1.2/$. You invest $1 in an euro asset at t, which has an interest of 8%. When the asset expires at t+1, you get paid € (x.x round UP to one decimal place). If Et+1 = €1.02/$, then your rate of return in terms of € is % (round to the nearest integer). Question 8 options: Blank # 1 Blank # 22. These options are traded in the market: call option with an Exercise (Strike) Price of 1.15 $/€ and premium (option cost) of 0.03 $ per euro. (a) If the Spot exchange rate is 1.17 $/ €, is the option ITM, ATM or OTM? (b) Calculate Intrinsec value and Time value of the option. (c) If put options are traded with same Exercise Price at same cost of 0.03 $ per euro and Fwd for the same maturity is traded at 1.17 $/ €, how can an astute tradem arbitrage? Explain. (d) Calculate Intrinsec value and Time value of the put option mentioned above.For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the cost associated with not exercising the call (in total) is US$
- For a put option of CN¥ with $0.14 exercise price and $0.0005 premium, the breakeven spot price for the put is US$ the spot price above which the put is not exercised is US$FÐI may involve mergers with and acquisitions of existing foreign businesses. Select one: O True O False From the perspective of the writer of a put option written on C52,500. it the strike price is $1.25/e, and the option premium is $2,625, at what exchange rate do you start to lose money? Select one: O a $1.2/c O b $1.20/€ O c. S1.30/€ O d $1.52/eConsider the following quoted spot rates and identify which statement(s) below is(are) true: Spot Bid Rate Spot Ask Rate AUD1.5455/USD AUD1.5656/USD USD1.2599/GBP USD1.2685/GBP AUD1.9547/GBP AUD1.9638/GBP O a. A riskless arbitrage can be made only by going "clockwise" around the triangle. O b. None of the options in this question is true. O c. A riskless arbitrage can be made only by going "anti-clockwise" around the triangle.
- Solve all questions , otherwise I will give you downvote CIP stands for covered interest parity. Solve for blank. According to CIP, 1. if i_$=5%, i_yen=10%, current exchange rate is 100 yen/$, then forward exchange rate would be ____ yen/$. 2. if i_$=5%, i_yen=10%, forward exchange rate is 100 yen/$, then current exchange rate is ____ yen/$. 3. if i_$=5%, current exchange rate is 110 yen/$, forward exchange rate is 100 yen/$, then i_yen= ____ %. (if your answer is 8%, you can put 8 in the blank, not 0.08). 4. US interest rate is i_$=20%. An investor is indifferent between putting $ savings in US saving account, or converting their $ savings into euro, buy a DaVinci painting, hold on to the Painting for one year, sell it at the end of the year for euro, and convert euro back to $. If the painting is expected to appreciate 15% over the next year, then euro is expected to appreciate ____% relative to $ over the same year.which one is correct please confirm? Q9: An option that gives the owner the right to buy a financial instrument at the exercise price within a specified period of time is a call option put option American option European optionSuppose the exchange rate of euro at current spot market is $1.25/€. If a put option has a strike price of $1.18/€ then we can say this option is a) inthemoney b) outofthemoney c) atthemoney d) past breakeven