1. Peregrine Funds-Jakarta. Samuel Samosir trades currencies for Peregrine Funds in Jakarta, Indonesia. He focuses nearly all of his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $0.6000/S$. After considerable study this week, he has concluded that the Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $0.7000/S$. He has the following options on the Singapore dollar to choose from:

b. Using your answer to part

a, what is Samuel's break-even price?

c. Using your answer to part

a, what is Samuel's gross profit and net profit (including the pre- mium) if the spot rate at the end of the 90 days is indeed $0.7000/S$?

d. Using your answer to part

a, what is Samuel's gross profit and net profit (including the pre- mium) if the spot rate at the end of the 90 days is indeed $0.8000/S$?

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Option Strike Price Premium Put on Sing S $0.6500/5$ $0.00003/5$ Call on Sing $ $0.6500/$$ $0.00046/S$ a. Should Samuel buy a put on Singapore dollars or a call on Singapore dollars?