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Q1: If Jasim purchase a put option on Canadian dollar from Sara for a premium of...
13. The premium on a pound put option is $.03 per unit. The exercise price is...
13. The premium on a pound put option is $.03 per unit. The exercise price is s1.60. The break-even point for the buyer and seller is? (Assume put option are speculators.) zero transactions costs and that the buyer and seller of the 14. You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate...
The existing spot rate of the Canadian dollar is $0.82/C$. The premium on a Canadian dollar...
The existing spot rate of the Canadian dollar is $0.82/C$. The premium on a Canadian dollar call option is $0.04. The exercise price is $0.81/C$. The option will be exercised on the expiration date if at all. If the spot rate on the expiration date is $0.80, the profit (if any) as a percent of the initial investment (the premium paid) is: a. 0% b. 100% c. - 100% d. 50%
15. The existing spot rate of the Canadian dollar is s.82. The premium on a Canadian...
15. The existing spot rate of the Canadian dollar is s.82. The premium on a Canadian dolar call option 1s $$.04. The exercise price is $.81. The option will be exercised on the expiration date if at all. If the spot rate on the expiration date is $.87, the profit as a percent of the initial investment (the premium paid) is:
4. You purchase a put option on Swiss francs for a premium of $.05, with an...
4. You purchase a put option on Swiss francs for a premium of $.05, with an exercise price of $.50. The option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $.58, how much is the payoff of this long option? And your profit? (And also, please draw the payoff diagram to a long put option holder, optional, for extra credits). (Answer: -$0.05; 0)
• Long cury strangle Call option premium - 50.03., Put option premium - $0.02 € Call...
• Long cury strangle Call option premium - 50.03., Put option premium - $0.02 € Call option strike price 1.25/6, Put option strike price $1.15 € Option contract size - €62,500 Draw graphs of call option, put option, and straddle Mark BE point and Strike prices Mark each premium 1 S105 S 15E $1.20 € $1.25 € $1.30/E Long call option Spot exchange rate Exercise (NY) Holder's net profit per unit Exercise (NY Holder's net profit per unit Net profit...
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call...
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call option strike price = $1.15/€, Put option strike price - $1.05/€ Option contract size = €62,500 Draw graphs of call option, put option, and straddle • Mark BE point and Strike prices • Mark each premium $1.05/€ $1.10/€ $1.15/€ | $1.20/€ $1.25/€ $1.30/€ Spot exchange rate Does holder exercise? Sell call option Holder's net profit per unit Seller's net profit per unit Does holder...
Long currency straddle Call option premium = $0.05/€, Put option premium = $0.05/€ Strike price =...
Long currency straddle Call option premium = $0.05/€, Put option premium = $0.05/€ Strike price = $1.10/€, Option contract size = €62,500 Draw graphs of call option, put option, and straddle Mark BE point and Strike prices Mark each premium Spot exchange rate $1.00/€ $1.05/€ $1.10/€ $1.15/€ $1.20/€ $1.25/€ Long call option Exercise (N/Y) Holder’s net profit per unit Long put option Exercise (N/Y) Holder’s net profit per unit Net profit Net profit per unit (graph) Short currency straddle Call...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium of S0.05/£. The strike price is $1.20/£. (a) Graph the profit/loss on the option contract. (b) What is the break-even price? (a) At what range of spot prices does John make profit? 2. Bank of America buys a call option on euros (contract size is €625,000) at a premium of $0.02 per euro. If the exercise price is $0.98 and the spot price of...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per unit, with an exercise (strike) price of $1.16; the option will not be exercised until the expiration date, if at all. You borrowed the money for the premium at 8% continuous compounding rate. If the euro's market price on the expiration date (t 6/12) is $1.06, how much is your net profit/loss per unit in dollars and in euros? Facts Graph: Calculations
IBM sells a call option on euros (contract size is €600,000) at a premium of $0.02...
IBM sells a call option on euros (contract size is €600,000) at a premium of $0.02 per euro. If the exercise price is $1.44/€ and the spot price of the euro at date of expiration is $1.45/€, A. Will this option be exercised, that is, is in-the-money or out-of-the-money? Why? (2 points) B. What is IBM’s profit (or loss) on the call option? (3 points)
13. The premium on a pound put option is $.03 per unit. The exercise price is s1.60. The break-even point for the buyer and seller is? (Assume put option are speculators.) zero transactions costs and that the buyer and seller of the 14. You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate...
15. The existing spot rate of the Canadian dollar is s.82. The premium on a Canadian dolar call option 1s $$.04. The exercise price is $.81. The option will be exercised on the expiration date if at all. If the spot rate on the expiration date is $.87, the profit as a percent of the initial investment (the premium paid) is:
• Long cury strangle Call option premium - 50.03., Put option premium - $0.02 € Call option strike price 1.25/6, Put option strike price $1.15 € Option contract size - €62,500 Draw graphs of call option, put option, and straddle Mark BE point and Strike prices Mark each premium 1 S105 S 15E $1.20 € $1.25 € $1.30/E Long call option Spot exchange rate Exercise (NY) Holder's net profit per unit Exercise (NY Holder's net profit per unit Net profit...
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call option strike price = $1.15/€, Put option strike price - $1.05/€ Option contract size = €62,500 Draw graphs of call option, put option, and straddle • Mark BE point and Strike prices • Mark each premium $1.05/€ $1.10/€ $1.15/€ | $1.20/€ $1.25/€ $1.30/€ Spot exchange rate Does holder exercise? Sell call option Holder's net profit per unit Seller's net profit per unit Does holder...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium of S0.05/£. The strike price is $1.20/£. (a) Graph the profit/loss on the option contract. (b) What is the break-even price? (a) At what range of spot prices does John make profit? 2. Bank of America buys a call option on euros (contract size is €625,000) at a premium of $0.02 per euro. If the exercise price is $0.98 and the spot price of...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per unit, with an exercise (strike) price of $1.16; the option will not be exercised until the expiration date, if at all. You borrowed the money for the premium at 8% continuous compounding rate. If the euro's market price on the expiration date (t 6/12) is $1.06, how much is your net profit/loss per unit in dollars and in euros? Facts Graph: Calculations
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