Canadian dollar put option are available with exercise price

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Reference no: EM131869770

Canadian dollar call options are available with an exercise price of $0.91 and a premium of $0.02. Also, Canadian dollar put options are available with an exercise price of $0.88 and a premium of $0.02.

Giacomo is an option speculator for Brio Inc. He anticipates the Canadian dollar to appreciate from its current spot price of $0.90 to $0.93.

If the future spot rate of the Canadian dollar is $0.92, Giacomo's per unit profit or loss is _____, and he _______ exercise the option.

If the future spot rate of the Canadian dollar is $0.94, Giacomo's per unit profit or loss is _____, and he _______ exercise the option.

If there are identical Canadian currency options, with the only difference is another 90 days until maturity, the premiums will be _____.

This afternoon, news about international economic conditions increased the level of uncertainty regarding the Canadian dollar. However, the spot rate of the Canadian dollar remained unchanged at $0.90. The premium of the call price will be ________ the $0.02 premium that prevailed earlier.

Reference no: EM131869770

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