Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his timeand 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 willappreciate versus the U.S. dollar in the coming 90 days, probably to about $1.44/S$. He isconsidering trading options to profit and has the following options on the Singapore dollarto choose from:Option choices on the Singapore dollar:Strike price (US$/Singapore dollar)Premium (US$/Singapore dollar)Call on S$$1.35$0.047Put on S$$1.357$0.006Samuel decides to sell one put option in Singapore dollars. What will be Samuel's profit/lossif the ending spot rate is $1.457/S$ in 90 days? Keep all decimal places.

We are given the following options on the Singapore dollar:current spot rate is $1.39 /S$The…

Answered: o sell one put option in Singapore…

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o sell one put option in Singapore dollars. What will be Samuel's profit/loss

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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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?
Andrea is an option speculator. She anticipates the Canadian dollar to depreciate from its current level of 0.90 USD/CAD to 0.85 USD/CAD. Currently, Canadian dollar call options are available with an exercise price of 0.91 USD/CAD and a premium of $0.02. Also, Canadian dollar put options are available with an exercise price of 0.88 USD/CAD and a premium of $0.02. If the future spot rate of the Canadian dollar is 0.85 USD/CAD, what is Andrea's net profit or loss per unit?
If you buy a put option contract on Tesla Inc, with the most heavily traded strike price today. What does owning this contract give you the right to do? If this is your only position in Tesla, are you long or short Tesla?
The investor X decides to: Buy a call option for $10 with $100 as strike price Buy a call option for $15 with $90 as the strike price Sell a put option for $10 with $100 as the strike price Buy a put option for $15 with $120 as the 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 $160 c)Represent the results of the investor for both cases a) and b) in the same figure
(Call Option P/L)Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/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 $0.066 Put on S$ $1.37 $0.006 Samuel decides to buy call options in Singapore dollars. What is Samuel's (net) profit/loss (in dollars) per option if the spot rate is $1.37/S$ at maturity? Keep the sign and all decimal places. Do not include currency sign in your answer.
23. Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound option represents 31,250 units. Assume that at the time of the purchase, the spot rate of the pound is $1.51 and continually rises to $1.62 by the expiration date. The highest net profit possible for the speculator based on the information above is: A) $1,562.50. B) -$1,562.50. C) -$1,250.00. D) -$625.00.
26. Suppose an investor buy a European call option at price c, K is the strike price and ST is the spot price of the asset at maturity of the contract, when ( ),the investor will exercise the option.
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.
Choose all expressions that accurately complete the statement below: Writing a European call option on £10,000 at a strike price of $1.80/£ and a premium of $0.02/£: Group of answer choices Obligates the optionholder to purchase £10,000 for $18,000 USD. Will be profitable for the seller when the price of the GBP exceeds the put-call parity rate. Obligates the writer to sell £10,000 on the expiration date if the optionholder chooses to exercise. Allows the optionholder to exercise the option at any point up to the expiration date. Earns the seller a premium of $200.
For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the call option holder should __ the call? a. exercise b. not exercise
Denise’s broker has recommended a long put, what would be her maximum gain on the position? The premium received Strike price – Premium paid The premium paid Unlimited

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