1. (a) (i) You run an Irish company which is an exporter to USA. You know that you will receive a certain amount of dollars in 6 months. What type of option contract is appropriate for hedging your currency risk? Why? [3] (ii) An investor buys one call option contract on a stock with a strike price of 38.5 and sells a call option contract on the same stock with a strike price of 40 . The market prices of the options are 2.40 and 1.80 respectively. The options have the same maturity date. Describe the in- vestor's position and the possible gain/loss he will get (taking into account the initial investment). Make a graph of your gain/loss. [6]