What is the maximum amount the trader can make

Assignment Help Business Management

Reference no: EM131278700

A trader executes a ‘‘bear spread'' on the Japanese yen consisting of a long PHLX 103 March put and a short PHLX 101 March put.

a. If the price of the 103 put is 2.81(100ths of ¢/¥), while the price of the 101 put is 1.6 (100ths of ¢/¥), what is the net cost of the bear spread?

b. What is the maximum amount the trader can make on the bear spread in the event the yen depreciates against the dollar?

c. Redo your answers to Parts a and b, assuming the trader executes a ‘‘bull spread'' consisting of a long PHLX 97 March call priced at 1.96 (100ths of ¢/¥) and a short PHLX 103 March call priced at 3.91 (100ths of ¢/¥). What is the trader's maximum profit? Maximum loss?

Reference no: EM131278700

Questions Cloud

Calculate vws net euro gain or loss on its futures position : Calculate VW's net euro gain or loss on its futures position. Compare this figure with VW's gain or loss on its unhedged position.

Does the circuit behave as claimed in the text : Increase the delay of the inverter in the circuit to 3 ns, repeat the simulation, and explain the results. What would you expect to happen in the real circuit?

What is your net profit on the contracts : If the exercise price is $0.91 and the spot price of the euro at date of expiration is $0.93, what is Citigroup's profit (loss) on the call option?

How each perspective would view or explain the issue : Include elements of culture in your analysis. Provide a conclusion that discusses which perspective you think is most applicable to the issue or how the three perspectives complement one another in understanding the issue.

What is the maximum amount the trader can make : What is the maximum amount the trader can make on the bear spread in the event the yen depreciates against the dollar?

What is the value of a three month phlx call option : Calculate the value of a 30-day PHLX call option on the pound at a strike price of $1.57.- What is the value of a three-month PHLX call option on the Japanese yen at a strike price of $0.0099/¥?

Describe a different sdlc model : The paper will be five pages: (a) Describe the 7 Step SDLC - 2 pages, (b) Describe a different SDLC Model (4 step or 12 step) - 2 pages, (c) Compare and contrast the 7 Step Model and the second model you selected (4 step or 12 step). (DO NOT discu..

Rising edge of a clock signal : Prove that the fundamental-mode flow table of any flip-flop that samples input(s) and change(s) outputs on the rising edge only of a clock signal CLK contains an essential hazard.

What is the current price of a june 20 phlx yen call option : If put-call parity holds, what is the current price of a June 20 PHLX yen call option with an exercise price of $0.0077?

User Account

All Pages