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100% accuracy please. let me know if any questions. Chapter 5 Homework (5 points each). 1 Compute the forward discount or premium for the Mexican

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100% accuracy please. let me know if any questions.

image text in transcribed Chapter 5 Homework (5 points each). 1 Compute the forward discount or premium for the Mexican peso whose 90-day forward rate is $.102 and spot rate is $.10. State whether your answer is a discount or premium. 2 Bob James purchased a call option on British pounds for $.02 per unit. The strike price was $1.45 and the spot rate at the time the option was exercised was $1.46. Assume there are 31,250 units in a British pound option. What was Bob's net profit on this option? 3 Nancy Marchand purchased a put option on British pounds for $.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a British pound option. What was Nancy's net profit on the option? 4 Peter Gallager sold a call option on Canadian dollars for $.01 per unit. The strike price was $.76, and the spot rate at the time the option was exercised was $.82. Assume Peter did not obtain Canadian dollars until the option was exercised. Also assume that there are 50,000 units in a Canadian dollar option. What was Peter's net profit on the call option? 5 James Mason sold a put option on Canadian dollars for $.03 per unit. The strike price was $.75, and the spot rate at the time the option was exercised was $.72. Assume James immediately sold off the Canadian dollars received when the option was exercised. Also assume that there are 50,000 units in a Canadian dollar option. What was James's net profit on the put option? 6 Dozeir Corp. purchased Canadian dollar call options for speculative purposes. If these options are exercised, Dozier will immediately sell the Canadian dollars in the spot market. Each option was purchased for a premium of $.03 per unit, with an exercise price of $.75. Dozier plans to wait until the expiration date before deciding whether to exercise the options. Of course, Dozier will exercise the options at that time only if it is feasible to do so. In the following table, fill in the net profit (or loss) per unit to Dozier Corp. based on the listed possible spot rates of the Canadian dollar on the expiration date. Possible Spot Rate of Canadian Dollar on Expiration Date $.76 .78 .80 .82 .85 .87 Net Profit (Loss) per Unit to Dozier Corporation if Spot Rate Occurs 7 Sam Co. has purchased Canadian dollar put options for speculative purposes. Each option was purchased for a premium of $.02 per unit, with an exercise price of $.86 per unit. Sam Co. will purchase the Canadian dollars just before it exercises the options (if it is feasible to exercise the options). It plans to wait until the expiration date before deciding whether to exercise the options. In the following table, fill in the net profit (or loss) per unit to Sam Co. based on the listed possible spot rates of the Canadian dollar on the expiration date. Possible Spot Rate of Canadian Dollar on Expiration Date $.76 .79 .84 .87 .89 .91 Net Profit (Loss) per Unit toSam Corporation if Spot Rate Occurs

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