Company XYZ makes widgets. They will have 500 widgets to sell in 6 months. The current price is $60 per widget. The company's cost to create each widget is $40. The company decides to insure its position. The company has the following two options to hedge its risks: enter into a forward contract with a forward price of $61.80 buy a 6 -month $60-strike European put option for a premium of $5.25 The risk-free rate is 6% convertible semiannually. For what range of prices in 6 months would profit for option (1) be greater than the profit for option (2)? A. 56.39 to oo B. 0 to 67.05 C. 67.05 to oo D. 0 to 67.21 E. 67.21 to oo

You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD strike price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 month and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is payable on both entry and exit and is USD 12.21. What is the net profit on this transaction in USD? O a. -190,946.52 Ob. -31,824.42 Oc. -190,800.00 O d. -190,873.26 Oe. -55,800.00 You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD strike price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 month and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is payable on both entry and exit and is USD 12.21. What is the net profit on this transaction in USD? O a -190,946.52 Ob 31,824.42 O-190,800.00 Od 190,873.26 -55.800.00

Three months ago you short a forward contract on soya bean that expires today has a forward delivery price of$400   per Metric Ton. The current forward price is$420   . The three-month risk-free interest rate (with continuous compounding) is8%   p.a. What is the value of the short forward contract?     A) +$27.92   B) −$27.92   C) +$20.00   D) −$35.68 ​​​​​​​

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