Question

International Finance: (3 questions)1. Consider a European call option trading on the CME with a strike

price of USD 0.7000 / SFR selling at a premium of USD 0.0180 / SFR.  Each contract is for SFR 125,000.  What is the total profit on an investment in this option if the spot rate at expiration is USD 0.7320 / SFR?

2.  Consider a European put option selling on the Chicago Merchantile Exchange with a strike price of USD 0.7000 / CAD selling for a premium of USD 0.0120 / CAD.  Each contract is for CAD 125,000.  What is the total profit on an investment in this option if the spot rate at expiration is USD 0.6760 / CAD?

3. Find the value today in USD of a 1-period at-the-money call option on YEN 300,000. The spot exchange rate is YEN 100/ USD.In the next period, the YEN can increase by 15 percent or decrease by 15 percent. The risk free rate in USD is 5 percent. The risk free rate in YEN is 1 percent. (Is the answer for Q. 3 3308.82?)

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"