John Hill is a Sydney-based investor. He has been closely following his investment in 1,000 shares of Obrekete, an Italian firm that went public in June 2018. When he purchased his 1,000 shares at €80 per share, the euro was trading at AUD$2.5657/€. Currently, the share is trading at €86 per share and the exchange rate is AUD$2.5563 / €. d. If John waits to sell his shares when the price rises to €88 pet share, what will be his returns? e. If the current spot exchange rate changes to AUD$2.4863 / €, what would be the total return on the Obrekete investment in Australian dollars if the price remains at €86 per share?

John Hill is a Sydney-based investor. He has been closely following his investment in 1,000 shares of Obrekete, an Italian firm that went public in June 2018. When he purchased his 1,000 shares at €80 per share, the euro was trading at AUD$2.5657/€. Currently, the share is trading at €86 per share and the exchange rate is AUD$2.5563 / €. d. If John waits to sell his shares when the price rises to €88 pet share, what will be his returns? e. If the current spot exchange rate changes to AUD$2.4863 / €, what would be the total return on the Obrekete investment in Australian dollars if the price remains at €86 per share?

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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Show your work. Make it clear what the final answer is.
Alex is a currency speculator working for CIBC Currency funds in Toronto. He focuses nearly all of his time and attention on the U.S. dollar /Canadian dollar ($/C$) exchange rate. The current spot rate is $1.3546/C$. He believes that the Canadian dollar (C$) will appreciate versus the U.S. dollar over the coming 90 days. He can choose between the following options on Canadian dollar: Option Strike price Premium Put on C$ $1.400/C$ $0.00045/C$ Call on C$ $1.415/C$ $0.00048/C$ Should Alex buy a put option on Canadian dollars or a call option on Canadian dollars?
Maverik Avengers is an active currency trader based in Kuala Lumpur, Malaysia. He has been following the movements of € closely since the official Brexit. He notices that the exchange rates between the € and RM are quoted directly at 5.0500-80 and the available 90-day forward points for the currency pair are 180-200. If Avengers speculates the spot rates between the € and RM to be trading at 5.0600-50 at the end of 90 days, demonstrate how Avengers can make a speculation profit with RM10 million.
During the year ended 30 Jun 2018, Genny, a resident of Australia, receives a fully franked dividend of $35258 Required: Calculate the value of the franking credit. plzz ans fast...
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S.dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. After considerable study, he has concluded that the Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.371 $0.047 Put on S$ $1.37 $0.006 Samuel decides to buy call options in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.286/S$ in 90 days? Keep all decimal places.
Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $10,000 to invest, and the current exchange rate is $2/£. a. How many shares can the investor purchase? Number of shares = b. Fill in the table below for rates of return after one year in each of the nine scenarios (three possible prices per share in pounds times three possible exchange rates). (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Price per Share (£) Pound-Denominated Return (%) Dollar-Denominated Return (%)for Year-End Exchange Rate $1.80/£ $2/£ $2.20/£ £35 % % % % % % £40 % % % % % % £45 % % % % % %
A bank customer will be going to London in June to purchase £100,000 in new inventory. The current spot and futures exchange rates are as follows: Exchange Rates dollars/pound Period Spot March June September December Rate 1.5342 1.6212 1.6901 1.7549 1.8416 The customer enters into a position in June futures to fully hedge her position. When June arrives, the actual exchange rate is $1.735 per pound. How much did she save? $ (Round your response to the nearest whole number.)
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. After considerable study, he has concluded that the Singapore dollar will depreciate versus the U.S. dollar in the coming 90 days, probably to about $1.35/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from: Option choices on the Singapore dollar: Call on S$ Put on S$ Strike price (US$/Singapore dollar) $1.50 $1.37 Premium (US$/Singapore dollar) $0.064 $0.006 Samuel decides to sell call options in Singapore dollars. What is Samuel's (net) profit/loss (in dollars) per option if the spot rate is $1.54/S$ at maturity?
Suppose you are a euro-based investor who just sold Microsoft shares that you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 per share; the exchange rate was $1.03 per euro. You sold the stock for $171 per share and converted the dollar proceeds into euro at the exchange rate of $0.94 per euro. First, determine the profit from this investment in euro terms. Second, compute the rate of return on your investment in euro terms. How much of the return is due to the exchange rate movement? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.) Profit Rate of return 51.6 % Rate of return due to exchange rate movement %
En Zahir, the CFO of Cahaya Berhad believes that all corporate securities have implicit or explicit option features and as a result, understanding securities that possess option features requires knowledge of the factors that determine an option's value. En Zahir is also aware that the most familiar options are stock options. On 13th June 2024, En Zahir buys call options on 50,000 units of Jelantas Berhad shares with an exercise price of RM40 per unit. The value of the options is RM2 per unit and the termination date is on 30th June 2024. On 30th June 2024, the share price of Jelantas Berhad share is RM42. From the above information you are required to compute En Zahir's gain or losses. Based on your computation, explain to En Zahir about this situation.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. After considerable study, he has concluded that the Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from: Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.36 $0.077 Put on S$ $1.37 $0.006 Samuel decides to buy call options in Singapore dollars. What is Samuel's Break-Even spot rate at maturity? Keep the sign and all three decimal places.
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