The following graph shows the contingency graph for purchasers of euro put options, with a premium of $0.06 and an exercise price of $1.38. NET PROFIT PER UNIT (Dollars per unit) 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 -0.01 -0.02 -0.03 -0.04 -0.05 -0.06 OD ← 1.3, 0 -0.07 + 1.22 1.24 1.26 1.28 1.30 1.32 1.34 1.36 1.38 1.40 FUTURE SPOT RATE (Dollars per euro) ? According to the graph, if the spot rate turns out to be $1.26, and the option is exercised, the buyer will According to the graph, break-even price is $0.04 $0.06 $0.01 $0.03 per unit.
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- The following graph shows the contingency graph for sellers of euro call options, with a premium of $0.08 and an exercise price of $1.16. NET PROFIT PER UNIT (Dollars per unit) 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 -0.01 -0.02 -0.03 -0.04 -0.05 -0.06 -0.07 -0.08 -0.09 1.12 1.14 1.16 1.18 1.20 1.22 1.24 1.26 1.28 1.30 FUTURE SPOT RATE (Dollars per euro) According to the graph, if the spot rate turns out to be $1.18, and the option is exercised, the seller will According to the graph, break-even price is per unit.1. The spot market quotes the exchange rate of the GHS to a CADS as GHS 3.562 while the 90-day forward quotes it at GH3.425. Required: Calculate the annualized forward premium or discount. 2. Suppose bid price for £=GHS6.27, ask price = GHS6.316. Required: Calculate the bid/ask spread.Q5: Current spot rates are as follows: USD/CHF 1.5384/89 USD/SGD 2.3895/05 EUR/USD 0.9678/83 AUD/USD 0.5438/43 What is the two-way price for CHF/SGD? On which side of this price would the customer sell SGD? What is the two-way price for EUR/AUD? On which side of this price would the customer buy EUR? What is the two-way price for EUR/CHF? On which side of this price would the customer buy CHF? What is the two-way price for CHF/AUD? On which side of this price would the customer sell CHF?
- eBook Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.40 has a premium of $0.015 per unit. A euro put option has a premium of $0.009 per unit. Some possible euro values at option expiration are shown in the table below. a. Complete the worksheet and determine the net profit per unit to Reska, Inc., for each possible future spot rate. Use a minus sign to enter loss values, if any, If the answer is zero, enter "0". Round your answers to three decimal places. Call Put Net $0.90 $ $ $ $ b. Determine the break-even points of the long straddle. What are the break-even points of a short straddle using these options? Round your answers to three decimal places. Lower break-even point (long straddle): $ Higher break-even point (long straddle): s Lower break-even point (short straddle): s Higher break-even point (short straddle): 5 Value of Euro at Option Expiration $1.05 $1.50 $ S S $ $2.00 $Calculate Duolingo’s underpricing if the offer price equals $102 and the closing price on the first trading day equals $134.26.Below is the price and other information for a European call option.Based on this information, find the premium with the Black-Scholes model. S = $ 98K = $ 100t = 3 monthsr = 5%S 2 = 25% (0.25)S = 0.5
- (Trade Credit Discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms: 1/10, net 20 2/10, net 30 Common Stock A Common Stock B Probability Return Probability Return .30 11% .20 25% .40 15% .30 6% .30 19% .30 14% .20 22%Refer to the following closing prices of USDTWC and XYZUSD. Compute for the corresponding %MTD change for currency XYZ against USD. Date USDTWC XYZUSD 1.800 1.650 1.600 1.250 1.200 1.300 12/31/2020 100.000 1/29/2021 2/1/2021 97.800 97.400 2/26/2021 3/1/2021 96.200 95.500 TODAY 94.750 XYZ appreciated against USD by 8.33% O XYZ appreciated against USD by 4.00% O XYZ depreciated against USD by 8.33% O XYZ depreciated against USD by 4.00% ASSUMING ALL ELSE EQUAL - according to the survey conducted by the Bangko Sentral ng Pilipinas, 49 out of 56 Philippine-based banks expect that the PHP will remain strong against the USD until the end of the year. SOLELY BASED ON THIS INFORMATION, which of the following statement is accurate? O The PHP is already expensive, hence it is due for a correction in the medium-term. The PHP will continue to appreciate against USD given the positive market expectations on the currency. The PHP is not affected by survey results since it is the demand and the…Consider the following money market information being quoted: Which of the following statements is true? Particulars GBP Interest Rate THB Interest Rate Spot Rate 1-year Expected Spot Rate Bid Rate 6.100% 10.550% THB5.6601/GBP THB5.9037/GBP C. Ask Rate 6.125% 10.625% THB5.6622/GBP THB5.9961/GBP a. There is an arbitrage which can only be made by initially borrowing GBP and then investing in THB. b. More than one of the options in this question are correct. The THB is selling at a premium to the GBP in the future. O d. There is an arbitrage which can only be made by initially borrowing THB and then investing in GBP.
- 2. 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.Suppose you work as a broker in an investment company, and there is an expectation that the market interest rate will be 0.029. based on this expectation you are required to calculate the market price for the following CD;Issue date: 1 January 2021 Maturity date:10 May 2021. The face value OMR 10000. Interest on CD: 5 percent. Select one: a. 15942.02 b. 15574.10 c. 15677.97 d. All the given choices are not correct e. 15572.50Required: Based on the following formula and the expression for inflation rate, calculate the H DE HIF EHIF = PH-PF π F= 3% EH/F=0.7341 EHF=0.7361 country. T denotes the growth rate in price level (inflation). Note: H- Home country; F - Foreign