If call options on USD with a strike price of AUD1.2604/USD have a premium of AUD0.0283, what is the break-even price for a buyer or a seller of these options? Assume that there are no brokerage fees. Ⓒa. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2887 b. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2321 c. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2887 d. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2321 e. The buyer's BEP is AUD 1.2604 and the seller's BEP is AUD 1.2887

If call options on USD with a strike price of AUD1.2604/USD have a premium of AUD0.0283, what is the break-even price for a buyer or a seller of these options? Assume that there are no brokerage fees. Ⓒa. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2887 b. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2321 c. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2887 d. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2321 e. The buyer's BEP is AUD 1.2604 and the seller's BEP is AUD 1.2887

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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3. You have $150,000 for speculating with options and know the market value tendency is falling. Strike = $80 Call = $7 / option Put = $10 / option Probable market values at maturity: 60, 70, 80, 90, 100. Size of contract: one share. Required: a) Show the net results for each market value. b) What would be the maximum loss? c) What would be the equilibrium market value?
The investor Y decides to: Buy a call option for $5 with $200 as strike price Sell a put option for $10 with $100 as strike price a)Calculate the result of the investor if the market price is $60 b)Calculate the result of the investor if the market price is $260 c)Represent the results of the investor for both cases a) and b) in the same figure
A speculator has purchased United States dollar put options, with an exercise price of A$1.30and a premium of A$0.05 per unit.(a) Calculate the break-even price.(b) Calculate the profit or loss of the option for the speculator if the spot rate at the time the speculator considers exercising the options is : (1) A$1.20 (2) A$1.28 (3) A$1.34.(c) What is the maximum profit and maximum loss for the speculator?
Q9. How would you hedge the risk of a price rise using a derivative? Group of answer choices 1. You would take out a spot contract to sell the underlying. 2. You would take out a forward contract to sell the underlying. 3. You would take out a spot contract to buy the underlying. 4. You would take out a forward contract to buy the underlying.
Assume interest rate is zero. In a shout call option the strike price is $30. The holder shouts when the asset price is $40. What is the payoﬀ from the option if the ﬁnal asset price is $35? A. $0 B. $5 C. $10 D. $15
If put options on USD with a strike price of AUD6.9/USD have a premium of AUD4.3, what is the break- even price (BEP) for a buyer or a seller of these options? Assume that there are no brokerage fees. Question Answer a. The buyer's BEP is AUD 2.6000 and the seller's BEP is AUD 11.2000 b. The buyer's BEP is AUD 2.6000 and the seller's BEP is AUD 2.6000 c. The buyer's BEP is AUD 11.2000 and the seller's BEP is AUD 11.2000 d. The buyer's BEP is AUD 11.2000 and the seller's BEP is AUD 2.6000 e. The buyer's BEP is AUD 6.9000 and the seller's BEP is AUD 11.2000
An investor has purchased United States dollar call options, with an exercise price of A$1.15 anda premium of A$0.03 per unit.(a) Calculate the break-even price. (b) Calculate the profit or loss of the option for the investor if the spot rate at the time the investor considers exercising the options is : (1) A$1.10 (2) A$1.17 (3) A$1.23.(c) What is the maximum loss for the investor?(d) Explain why the investor could have an unlimited profit if the options are exercised.(e) Explain in general the similarities of and differences between a currency call option and a currency put option.
The profit (loss) experienced on option B is $ ? (Round to the nearest dollar. Enter a negative number for loss.) The profit (loss) experienced on option C is $ ? (Round to the nearest dollar. Enter a negative number for loss.) The profit (loss) experienced on option D is $ ? (Round to the nearest dollar. Enter a negative number for loss.) The profit (loss) experienced on option E is $ ? (Round to the nearest dollar. Enter a negative number for loss.) How do I find the calculations for these questions?
A firm has a payable of €2,400,000.00. They hedge this exposure with a call option with a strike price of $ 1.2083 / €. The premium of the option is $0.0121. If at the time of payment the spot price ends up equal to $ 1.2687 / €. What is the firm's total cost?

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