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1.To buy a call C1 at a strike price of K1, or to buy a call C2 at a strike price of K2, K1 <
1.To buy a call C1 at a strike price of K1, or to buy a call C2 at a strike price of K2, K1 < K2, which has a larger profit range? Why is that?
2.First Commercial Bank has a total of 100 million US dollars and 10 billion Japanese dollars in its foreign currency positions. Currently, the exchange rate between US dollars and Taiwan dollars is 30 NT/$, with a fluctuation of 10%; the exchange rate between Japanese dollars and Taiwan dollars is 0.35 NT/, with a fluctuation of 8%; and the correlation coefficient between US dollars and Japanese currency exchange rate is 0.4. Excuse me, what is the fluctuation of the First Bank's foreign currency position?
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