Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He ocuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cre ate. The current spot rate is $1.39/S$. After considerable study, he has oncluded that the Singapore dollar will appreciate versus the U.S. dollar in oming 90 days, probably to about $1.44/S$. He is considering trading opt o profit and has the following options on the Singapore dollar to choose f Option choices on the Singapore dollar: Put on S$ Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.35 $0.047 $1.357 $0.006

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
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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:
Call on S$
Option choices on the Singapore dollar:
Strike price (US$/Singapore dollar)
Premium (US$/Singapore dollar)
0.106
$1.35
0.006
$0.047
Put on S$
$1.357
Samuel decides to sell one put option in Singapore dollars. What will be
Samuel's profit/loss if the ending spot rate is $1.457/S$ in 90 days? Keep all
decimal places.
$0.006
Transcribed Image Text:You Answered Correct Answer Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/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: Call on S$ Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) 0.106 $1.35 0.006 $0.047 Put on S$ $1.357 Samuel decides to sell one put option in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.457/S$ in 90 days? Keep all decimal places. $0.006
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