1.

If the current spot AUD/USD exchange rate is AUD0.87/USD, what is the intrinsic value of a USD50,000 put option with an exercise price of AUD0.783/USD?

Select one:

a. The option has no intrinsic value.

b. AUD 5000

c. AUD 43500

d. AUD 39150

e. AUD 50000

f. AUD 63857

g. AUD 57471

2.

Roo-Fus Inc is considering financing its international expansions by borrowing in the international debt markets. The current annualized 30day LIBOR rate is 4.5%. Roo-Fus Inc expects that the next period's 30-day LIBOR is 9.5%. Roo-Fus Inc's credit rating implies that it will face a 1.4% premium over LIBOR. What are Roo-Fus Inc's (annualized) borrowing costs?

Select one:

a. This period: 5.9%. Next period: 10.9%

b. This period: 5.9%. Next period: 5.9%

c. This period: 10.9%. Next period: 10.9%

d. This period: 4.5%. Next period: 9.5%

e. This period: 4.5%. Next period: 4.5%