You purchase a call option on euro for a premium of $0.01 per euro, with an...
You purchase a call option on euro for a premium of $0.01 per euro, with an exercise price of €1 =$1.16. If at the maturity date, the spot rate is €1=$1.20, (a) What is your net profit (or loss) per euro at the maturity date? (b) Draw a net profit graph for buying this call option. (The vertical axis of the graph is net profit of buying this call opton, the horizontal axis is the future spot rate at maturity.)
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You purchase a call option on euro for a premium of $0.01 per
euro, with an...
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
Suppose you buy a call option on a $100,000 worth of euros with an exercise price of $1.10 per euro for a premium of $10...
Suppose you buy a call option on a $100,000 worth of euros with an exercise price of $1.10 per euro for a premium of $1000. If on expiration the spot exchange rate is $1.12 per euro, what is your net profit or loss?
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...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro at a premium of 3.80cents per euro ($0.0380/euro) and with an expiration date three months from now. The option is for euro100 comma 000. Calculate Henrik's profit or loss should he exercise before maturity at a time when the euro is traded spot at strike prices beginning at $1.10/euro, rising to $1.34/euro in increments of $0.04. The profit or loss should Henrik exercise before...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro at a premium of 3.80cents per euro ($0.0380/euro) and with an expiration date three months from now. The option is for euro100 comma 000. Calculate Henrik's profit or loss should he exercise before maturity at a time when the euro is traded spot at strike prices beginning at $1.10/euro, rising to $1.34/euro in increments of $0.04. The profit or loss should Henrik exercise before...
• 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...
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...
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...
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...
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
• 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...
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...
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