American Express sells a call option on euros (contract size is €500,000) at a premium of $0.04 per euro. If the exercise price is $0.91 and the spot price of the euro at date of expiration is $0.93, what is American express’s profit or loss on this call option?
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American Express sells a call option on euros (contract size is €500,000) at a premium of $0.04 per euro. If the exercise price is $0.91 and the spot price of the euro at date of expiration is $0.93, what is American express’s profit or loss on this call option?
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- A speculator sells a put option on Canadian dollars (assume contract size 50.000) for a premium of $0.03 per unit, with an exercise price of $0.86. The option will not be exercised until the expiration date, if at all. If the spot rate for the Canadian dollar turns out to be $0.97 on expiration date, the profit (loss) to the seller per contract.is: O $1.500 O $1.500 O $4.000 O-$4,000i 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?Assume a call option on euros is written with a strike price of $1.120/€ at a premium of 4.60¢ per euro ($0.0460/€) and with an expiration date three months from now. The option is for €500,000. Calculate your profit or loss should you exercise before maturity at a time when the euro is traded spot at the following: a) $1.10/€ b) $1.15/€ c) $1.40/€
- An investor is bearish on the euro and believes it will decrease against the Japanese Yen. The investor purchases a currency put option on the euro with a strike price (exchange rate) of ¥135/€. When the investor purchases the contract, the spot rate of the euro is equivalent to ¥132/€. the premium is ¥2/€ a) Assume the euro's spot price at the expiration date (market price) is ¥125/€ The investor's profit = ¥/€ b) Assume the euro's spot price at the expiration date (market price) is ¥137/€ The investor's profit = ¥/€ c) What is the maximum loss Maximum loss = ¥/€ d) What the maximum profit Maximum profit = ¥/€Assume a call option on euros is written with a strike price of $1.2500/€ at a premium of 3.80¢ per euro ($0.0380/€) and with an expiration date three months from now. The option is for €100,000. Calculate your profit or loss should you exercise before maturity at a time when the euro is traded spot at a. $1.10 / € b. $1.15 /€ c. $1.20 / € d. $1.25 /€ e. $1.30 / € f. $1.35 /€ g. $1.4 /€Compute for the gain or loss from the derivative contract. And Show Complete solution. The call option has a strike price of P50 per 1 USD. On exercise date, the exchange rate is P48.
- Suppose the spot price of a euro in dollars is $0.932. The U.S. interest rate for 90 days is 6.875% and the euro rate for 90 days is 4.450%. All interest calculations are done as rate times (#days/360). a. What is the rate for a 90-day forward contract on the euro? b. Suppose the euro forward contract is currently quoted at $0.95. What type of transaction(s) should an arbitrageur conduct to take advantage of the apparent mispricing Only typed answerAn Australian company imports goods from Germany and expects the payment of EUR 250,000 after 60 days. Therefore, the company purchased a Call option with a strike price of AUD 1.25/EUR and a premium of 5% of the option value. At the maturity of the option, the market price is AUD/EUR=0.85. Specify the decision of the Australian company. O a. To not hedge the risk O b. To purchase the amount in EUR from the market O c To exercise the option O d. To search for another option contractAn investor is bullish on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call option on the euro with a strike price (exchange rate) of ¥124/€. When the investor purchases the contract, the spot rate of the euro is equivalent to ¥126/€. Assume the euro's spot price at the expiration date (market price) is ¥135/€. the premium is ¥3/€ a) Assume the euro's spot price at the expiration date (market price) is ¥135/€ The investor's profit = ¥/€ b) Assume the euro's spot price at the expiration date (market price) is ¥122/€ The investor's profit = ¥/€ c) What is the maximum loss Maximum loss = ¥/€
- Suppose that you are a speculator that anticipates a depreciation of the Singapore dollar (S$). You purchase a put option contract on Singapore dollars. Each contract represents S$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 $39,420For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the cost associated with not exercising the call (in total) is US$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$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$45,000 in the spot market at the current spot rate. Use the drop-down selections to fill in the following table from your (the buyer's) perspective to determine your net profit (on a per contract basis). (Note: Assume there are no brokerage fees.) Note: Assume there are no brokerage fees. Transaction Selling Price of S$ - Purchase Price of S$ - Premium Paid for Option = Net Profit Per Unit $0.77 -$0.73 -$0.03 Per Contract $34,650 $27,720 $31,185