You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a...
You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a premium of USD0.008 per JPY and with an expiration date six months from now. The option is for JPY12,500,000. What is your profit or loss at maturity if the ending spot rates are:
JPY110.00/USD JPY122.00/USD JPY135.00/USD JPY140.00/USD
Homework Answers
The profit or loss at maturity with different ending spot rates is calculated as below:
| Ending Spot Rates | ||||
| JPY110.00/USD | JPY122.00/USD | JPY135.00/USD | JPY140.00/USD | |
| Value of Option (¥) [A] | 12,500,000 | 12,500,000 | 12,500,000 | 12,500,000 |
| Strike Price (US$/¥) | $0.008 | $0.008 | $0.008 | $0.008 |
| Ending Spot Rate (¥/US$) | 110.00 | 122.00 | 135.00 | 140.00 |
| Ending Spot Rate in US$/¥ [1/Ending Spot Rate (¥/US$)] | $0.009091 (1/110) | $0.008197 (1/122) | $0.007407 (1/135) | $0.007143 (1/140) |
| Gross Profit on Option | $0.000000 | $0.000000 | $0.000593 | $0.000857 |
| Less Premium | ($0.000080) | ($0.000080) | ($0.000080) | ($0.000080) |
| Net profit (US$/¥) [B] | ($0.000080) | ($0.000080) | $0.000513 | $0.000777 |
| Net Profit/(Loss) [A*B] | ($1,000.00) | ($1,000.00) | $6,407.41 | $9,714.29 |
_____
Notes:
The value of gross profit on option is based on the following formula:
Gross Profit on Put Option = Strike Price - Ending Spot Rate in US$/¥ [If Strike Price>Ending Spot Rate in US$/¥]
or $0 [If Strike Price<Ending Spot Rate in US$/¥]
Add Answer to:
You write a put option on JPY with a strike price of
USD0.008/JPY (JPY125.00/USD) at a...
You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a...
You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a premium of USD0.008 per JPY and with an expiration date six months from now. The option is for JPY12,500,000. What is your profit or loss at maturity if the ending spot rates are: JPY110.00/USD JPY122.00/USD JPY135.00/USD JPY140.00/USD
Peleh writes a put option on the Australian dollar (A$) with a strike price of $0.9100/A$...
Peleh writes a put option on the Australian dollar (A$) with a strike price of $0.9100/A$ at a premium of $0.0245/A$ and with an expiration date six months from now. The option is for A$100,000. What is Peleh’s profit or loss at maturity if the ending spot rates are $0.8500/A$, $0.8800/A$, $0.9100/A$, $0.9400/A$, and $0.9700/A$?
You have written a put on yen with a strike of ¥115.00/$ at a premium of...
You have written a put on yen with a strike of ¥115.00/$ at a premium of 0.0080 cents per yen and an expiration of six months from now. The option is for ¥12,500,000. What is the profit or loss if the spot price at maturity is ¥110/$? $0, option is not exercised. $1,000, option is not exercised. $1,000, option is exercised. -$3528.98, option is exercised.
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price...
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000/(125.0075) at a premium of 0 00804 per yen and with an expiration date six month from now. The option is for 12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are V111/5, V11475, V12075, V126/5, V131/6, V135/S, and W14075 Kiko's profit or loss at maturity if the ending spot rate is 111/5 is (Round to the nearest...
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price...
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000 /¥ ( 125.00/$) at a premium of 0.0080¢ per yen and with an expiration date six month from now. The option is for $12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are ¥110/$, ¥116/$, ¥119/$, ¥124/$, ¥130/$, ¥136/$, and ¥139/$. Kiko's profit or loss at maturity if the ending spot rate is \110/$ is $ (Round...
Determine the value of a put option on the JPY that has the following characteristics: (a)...
Determine the value of a put option on the JPY that has the following characteristics: (a) is a European type, (b) matures in six months, and (c) has the strike price of USD 0.010. In the spot market, the JPY is trading at USD 0.009. The U. S. and Japanese interest rates are 4 percent and 1 percent, respectively (continuous compounding). The JPY has an annual standard deviation of 11 percent. (use x.xxxxx)
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option...
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
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...
You own a put option on Ford stock with a strike price of $14. The option...
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000/(125.0075) at a premium of 0 00804 per yen and with an expiration date six month from now. The option is for 12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are V111/5, V11475, V12075, V126/5, V131/6, V135/S, and W14075 Kiko's profit or loss at maturity if the ending spot rate is 111/5 is (Round to the nearest...
Kiko Peleh's Puts. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000 /¥ ( 125.00/$) at a premium of 0.0080¢ per yen and with an expiration date six month from now. The option is for $12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are ¥110/$, ¥116/$, ¥119/$, ¥124/$, ¥130/$, ¥136/$, and ¥139/$. Kiko's profit or loss at maturity if the ending spot rate is \110/$ is $ (Round...
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
Most questions answered within 3 hours.
-
Discuss the pros and cons of collaborative software such
as SameTime. Does it increase productivity? What...
asked 49 seconds ago -
A large cable company reports the following.
80% of its customers subscribe to its cable TV...
asked 2 minutes ago -
Buying your in-laws a gift because it’s expected is
due to the ____________ motive of gift-giving....
asked 3 minutes ago -
Calculate the expected value, the variance, and the standard
deviation of the given random variable X....
asked 46 minutes ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 1 hour ago -
1 point) Given the significance level α=0.01 find the following:
(a) left-tailed z value z= (b)...
asked 45 minutes ago -
Assuming you are the head of the software development unit at
Cyber.Soft, explain and justify why...
asked 11 minutes ago -
Magnesium and nitrogen react in a combination reaction to
produce magnesium nitride. 3 Mg + N2...
asked 19 minutes ago -
Two electrons are initially at rest separated by a distance of
2nm. At time t=0, they...
asked 17 minutes ago -
A martial artist is practicing breaking 5 boards. He is able to
break aboard with probability...
asked 24 minutes ago -
The rate constant of a first-order reaction is 2.95 × 10−4 s−1
at 350.° C. If...
asked 27 minutes ago -
implement a class called PiggyBank that will be used to
represent a collection of coins. Functionality...
asked 18 minutes ago