1. Suppose that 1 U.S. dollar can be exchanged for 179 Japanese Yen or can be exchanged for 0.87 Euro. Compute the Euro/Yen exchange rate.

2. Assume a call option is written with a strike price of $1.65/ at a premium of 5.20 cents per euro ($0.0520/) and with an expiration date nine months from now. The option is for 600,000. Calculate your profit or loss should you exercise before maturity at a time when the euro is traded spot at the following:

a) $1.56/

b) $1.94/

c) $1.63/

d) $1.72/

e) $1.59/

f) $1.85/

g) $1.65/