Reference no: EM132754677

Questions -

Q1. You purchase a call option on Mexican pesos for a premium of $0.02 per unit, with an exercise price of $0.22; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $0.11, your payoff is (round up to 2 decimal place, e.g. 0.06):

Q2. You are a speculator who sells a put option on Australian dollars for a premium of $0.03 per unit, with an exercise price of $0.79. The option will not be exercised until the expiration date, if at all. If the spot rate of the Canadian dollar is $0.96 on the expiration date, your payoff per unit is (round up to 2 decimal place, e.g. 0.06):

Q3. You purchase a put option on Canadian dollars for a premium of $0.03, with an exercise price of $1.53. The option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.67, your payoff per unit is (round up to 2 decimal place, e.g. 0.06):

Q4. You are a speculator who sells a put option on Canadian dollars for a premium of $0.02 per unit, with an exercise price of $0.94. The option will not be exercised until the expiration date, if at all. If the spot rate of the Canadian dollar is $0.83 on the expiration date, your payoff per unit is (round up to 2 decimal place, e.g. 0.06):

Q5. Carl is an option writer. In anticipation of a depreciation of the British pound from its current level of $1.50 to $1.45, he has written a call option with an exercise price of $1.53 and a premium of $0.02. If the spot rate at the option's maturity turns out to be $1.56, what is Carl's payoff (assuming the buyer of the option acts rationally)? (round up to 2 decimal place, e.g. 0.06)

Q6. You purchase a put option on Swiss francs for a premium of $0.03, with an exercise price of $1.86. The option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.84, your payoff per unit is (round up to 2 decimal place, e.g. 0.06):

Q7. Carl is an option writer. In anticipation of a depreciation of the British pounds from its current level of $1.50 to $1.45, he has written a call option with an exercise price of $1.58 and a premium of $0.03. If the spot rate at the option's maturity turns out to be $1.5, what is Carl's payoff (assuming the buyer of the option acts rationally)? (round up to 2 decimal place, e.g. 0.06)