Reference no: EM132932062
Problem 1: If you believe the present spot rate of gold, currently 1 oz of gold = 1800 USD will fall (eg will depreciate to 1600 USD), which of the following would likely yield you the largest speculative gain?
a. write (sell) a call option on gold
b. buy a call option on gold
c. write (sell) a put option on gold
d. buy a put option on gold
e. none of the above
Problem 2: If you believe the present spot rate of exchange of 1 Euro = 1.1200 USD will fall (eg will depreciate to 1 EUR = 1.1000 USD), which of the following would likely yield you the largest speculative gain?
a. write (sell) a call option on euro
b. buy a put option on euro
c. write (sell) a put option on euro
d. buy a call option on euro
e. none of the above