You purchased a put option on Australian dollars for RM0.02 per unit. The strike price was RM4.25, and the spot rate at the time the option was exercised was RM4.38. Assuming that there are 13,830 units in the Australian dollar option.Would you exercise the option? What will your net profit on the put option?
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You purchased a put option on Australian dollars for RM0.02 per unit. The strike price was RM4.25, and the spot rate at the time the option was exercised was RM4.38. Assuming that there are 13,830 units in the Australian dollar option.Would you exercise the option? What will your net profit on the put option?
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- You purchased a put option on British pounds for RM0.06 per unit. The strike price was RM5.60 and the spot rate at the time the pound option was exercised was RM5.68. Assume there are 47,580 units in a British pound option. What was your net profit on the option?A put option on Australian dollars with a strike price of $.80 is purchased by a speculator for a premium of $.02. If the Australian dollar’s spot rate is $.74 on the expiration date, should the speculator exercise the option on this date or let the option expire? What is the net profit per unit to the speculator? What is the net profit per unit to the seller of this put option?i sold a call option with an exercise price of $1.20/euro. the premium was $0.02/euro. what is my profit or loss if the exchange rate is $1.18/euro?
- You are considering a European put option and a European call option on ABC Ltd and have available the following information. The put option with an exercise price of $15 and time to maturity of 60 days is priced at $2.00. The call option with the same exercise price and time to maturity is priced at $3.00. The underlying asset price is $15. The risk-free rate is 2% per 60 days. Could an arbitrage profit be earned? If so, how much the arbitrage profit is? Show your works (Hint: use discrete put-call parity equation and consider two scenarios for stock price at maturity of the options: $10 or $20).You buy a European put option priced at $0.025/€ on €225,000 at a strike price of $1.50/€. If at maturity, the observed price is $1.60/€, what is the total net cash flow involved at the end of this investment whether you exercise or do not exercise this option?Suppose a European call option to buy 1 euro for 1.40 CAD costs 0.08 CAD. The option maturity is in two months and the forward exchange rate for the same maturity is 1.50 CAD per euro. What arbitrage opportunity exists? Explain how you can exploit this opportunity and how much the profit is. (Ignore the time value of money)
- Suppose that you are a speculator that anticipates a depreciation of the Singapore dollar (S$). You purchase a put option contract on Singapore dollars. Each contract represents S$40,000, with a strike price of $0.68 and an option premium of $0.02 per unit. Suppose that the spot price of the Singapore dollar is $0.62 just before the expiration of the put option contract. At this time, you exercise the option, while also purchasing S$40,000 in the spot market at the current spot rate. Use the drop-down selections to fill in the following table from your (the buyer's) perspective to determine your net profit (on a per contract basis). (Note: Assume there are no brokerage fees.) Note: Assume there are no brokerage fees. Transaction Selling Price of S$ - Purchase Price of S$ - Premium Paid for Option = Net Profit Per Unit $0.68 -$0.62 -$0.02 Per ContractSuppose that you are a speculator that anticipates a depreciation of the Singapore dollar (S$). You purchase a put option contract on Singapore dollars. Each contract represents S$45,000, with a strike price of $0.77 and an option premium of $0.03 per unit. Suppose that the spot price of the Singapore dollar is $0.73 just before the expiration of the put option contract. At this time, you exercise the option, while also purchasing S$45,000 in the spot market at the current spot rate. Assume the seller, after you exercise the put option, immediately sells the S$45,000 on the spot market. Now consider this scenario from the perspective of the individual or firm that sold you the put option. Note: Assume there are no brokerage fees. Use the drop-down selections to fill Transaction Selling Price of S$ - Purchase Price of S$ + Premium Paid for Option = Net Profit the following table from the sellers perspective. Per Unit $0.73 -$0.77 $0.03 Per Contract $32,850 $26,280 $39,420Jobbar sold a put option on British pounds for €.035 per unit. The exercise price was €1.1370, and the spot rate at the time the pound option was exercised was €1.1218. Assume there are 150,250 units in a British pound option. What was Jobbar's per-unit net profit on the option? What was Jobbar's total net profit on the option? Calculate the break-even spot rate (at expiration) for Jobbar. Discuss (briefly) the answer.
- Suppose that you are a speculator that anticipates an appreciation of the Singapore dollar (S$). You purchase a call option contract on Singapore dollars. Each contract represents S$25,000, with a strike price of $0.86 and call option premium of $0.02 per unit. Suppose that the spot price of the Singapore dollar is $0.92 just before the expiration of the call option contract. At this time, you call the contract and immediately sell the Singapore dollars to a bank at the current spot price. Now consider this scenario from the perspective of the individual or firm that sold you the call option. Note: Assume there are no brokerage fees. Use the drop-down selections to fill in the following table from the sellers perspective. Transaction Selling Price of S$ - Purchase Price of S$ + Premium Paid for Option = Net Profit Per Unit $0.86 -$0.92 $0.02 Per Contract $21,500 $12,900 $27,950Suppose that you are a speculator that anticipates an appreciation of the Singapore dollar (S$). You purchase a call option contract on Singapore dollars. Each contract represents S$25,000, with a strike price of $0.86 and call option premium of $0.02 per unit. Suppose that the spot price of the Singapore dollar is $0.92 just before the expiration of the call option contract. At this time, you call the contract and immediately sell the Singapore dollars to a bank at the current spot price. Use the drop-down selections to fill in the following table from your (the buyer's) perspective. Note: Assume there are no brokerage fees. Transaction Selling Price of S$ - Purchase Price of S$ Premium Paid for Option Net Profit = Per Unit $0.92 -$0.86 -$0.02 Per Contract $23,000 $18,400 $13,800An 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.