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 $0.047 Put on S$ $1.589 $0.006 Samuel decides to sell one put option in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.314/S$ in 90 days? Keep all decimal places.

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 $0.047 Put on S$ $1.589 $0.006 Samuel decides to sell one put option in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.314/S$ in 90 days? Keep all decimal places.

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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You Answered Correct Answer 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) -0.132 Call on S$ -0.047 $1.371 $0.047 Put on S$ $1.37 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. $0.006
Suppose that right now, the market price of one Chinese yuan (CNY) is USD 0.15; that is, one can purchase or sell CNY1.00 for USD0.15. The proportional standard deviation for CNY in terms of USD is 20%. The Chinese riskless return rate over a two-year period is projected to be 8%; U.S. ratesover the same period are 2%. What is the dollar value of a two-year European put on a single yuan if the exercise price of the put is USD0.20?
Toyota corporation is a Japanese automotive manufacturing company. The CFO is considering opening their new factory to assemble trucks in North Carolina, USA. The real discount rate required for the project is 12%. The inflation rate in Japan is 2%, and the inflation rate in the United States is 4%. Compare the nominal discount rates for the two project options, the first option is doing the project as an investment in US dollar, and the second option in their local currency the Japanese Yen.
An analyst is studying the movement of the stock Philippines. His research and came up with a different rates of return for Philippines, 25% for strong and 10% for weak economic scenarios. Based on the latest economic outlook, the probability of having a strong, normal, and weak economy, are 30%, 50%, and 20%, respectively. The total expected return of Philippines stock is 17% considering the various probabilities. Determine the rate of return of Philippines if the economy turns normal.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/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: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.34 $0.075 Put on S$ $1.37 $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 $1.56/S$ at maturity?
Ruth trades currencies for Industrial and Commercial Bank of China (ICBC) in Beijing. She is currently interested in the U.S. dollar/Australian dollar ($/A$) cross-rate. The current spot rate is $0.7200/A$. Ruth believes that the Australian dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $0.8100/A$. She has the following options on the Australian dollar to choose from: Option Put on A$ Call on A$ Strike Price $0.7500/A$ $0.7500/A$ Premium $0.00004/A$ $0.00048/A$ a. Should Ruth buy a put on Australian dollars or a call on Australian dollars? b. What is Ruth's breakeven price on the option purchased in part (a)?
Yize Shen at Sumatra Funds. Yize Chen trades currencies for Sumatra Funds in Jakarta. She focuses nearly all of her time and attention on the U.S. dollar (USD) to Singapore dollar (SGD) cross-rate. The current spot rate is USD 0.6000 = SGD 1.00. After considerable study, she has concluded that the Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about USD 0.7000 = SGD 1.00. She has the following options on the Singapore dollar to choose from: Should Yize buy a put on Singapore dollars or a call on Singapore dollars? What is Yize’s break-even price on the option purchased in part (a)? Using your answer from part (a), what are Yize’s gross profit and net profit (including premium) if the spot rate at the end of 90 days is indeed USD0.7000? Using your answer from part (a), what are Yize’s gross profit and net profit (including premium) if the spot rate at the end of 90 days is USD0.8000?
After collecting basis data, a canola grower feels that 775 dollars per tonne is a realistic forward cash price for the fall’s crop since November canola futures are trading at 800 dollars per tonne. To hedge, the producer purchases an at-the-money PUT for 20 dollars tonne on May 19th. While the hedge was in place, canola producers in Europe experienced crop failures and consumers in China began to import large quantities of canola produced in Canada. By October 15th, November canola futures had risen to 825 dollars per tonne. However, because of increased local production, the basis in the grower’s region weakened by 5 dollars tonne. On October 15th the grower sold his canola in the cash market. Use T-accounts to answer the following: a. What is the net selling price from hedging using the PUT? b. What price would the producer have received if he had hedged using futures?
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.
Samuel works for Peregrine Investments 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: Call on S$ Put on S$ Strike price (US$/Singapore dollar) $1.35 $1.45 Premium (US$/Singapore dollar) $0.047 $0.065 Samuel decides to sell put options on Singapore dollars. What is Samuel's break-even spot rate at maturity?
please quickly thanks !
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/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?

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