3 a) Citicorp makes a call option on Deutche mark (contract size DM500,000) at a premium of USDO.04 per DM. If the exercise price is USDO.71 and the spot price of the marks at the date of expiration is USDO.73, ascertain Citicorp's profit (loss) on the call option. (5 marks) 3 b) Suppose it costs Euro 22,000 to build a car in Germany, ship it to the United States and earn a normal profit during the year, the value of the Euro moves from USDO.67 to USDO.72. i) Ignoring inflation, ascertain dollar prices will Volkswagen have to charge at the end of the year to make as much profit as it did at the start of the year. (5 marks) ii) Determine whether cost in Euro be affected or not if you want to maintain the same USD equivalent price