Samuel decides to sell put options on Singapore dollars. What is Samuel's (net) profit/loss (in dollars) if the spot rate is $1.45/S$ at maturity? Keep the sign and all decimal numbers. Please type in the number without the currency signs. For example, if your answer is $1.25/S$, then type in 1.25 as your final answer. Keep four decimal places in your answer.
Samuel decides to sell put options on Singapore dollars. What is Samuel's (net) profit/loss (in dollars) if the spot rate is $1.45/S$ at maturity? Keep the sign and all decimal numbers. Please type in the number without the currency signs. For example, if your answer is $1.25/S$, then type in 1.25 as your final answer. Keep four decimal places in your answer.
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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Transcribed Image Text: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$
$1.35
$0.047
Put on S$
$1.37
$0.006
Samuel decides to sell put options on Singapore dollars. What is Samuel's (net) profit/loss
(in dollars) if the spot rate is $1.45/S$ at maturity? Keep the sign and all decimal numbers.
Please type in the number without the currency signs. For example, if your answer is
$1.25/S$, then type in 1.25 as your final answer. Keep four decimal places in your answer.
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