Willem Koopmans-the option speculator discussed in the chapter-must hold something of a directional view when purchasing a call option on Swiss francs.

a. Assuming Willem Koopmans did indeed purchase the call option on Swiss francs with a strike price of 58.5 (cents/SF), with a premium of \(\$ 0.005 / \mathrm{SF}\), what exactly are his directional expectations?

b. What is Willem's break-even price if his own-cost of capital is \(8 \%\) ?

c. How far must the dollar depreciate (Swiss franc appreciate) before Willem has reached his view or goal?

d. At what exchange rate would Willem exercise or sell his call option? Does it matter whether he sells or exercises it? Are they the same?