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 USD0.67 to USD0.72. 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. (5 marks) 3a) Assume a put option on Euro ( c ) is written with a strike price of USD1.1200/ , a premium payment of USD0.0300/e with an expiration date 3 months from now. One contract size of Euro is 662,500 units. i) If a dealer holds five (5) option contracts, calculate his net profit when the Euro is traded at USD1.0150/c. (2 marks) ii) Determine whether the dealer should exercise the option or not if the Euro is traded at USD1.1150. (3 marks) 3 b) Suppose it costs Euro 22,000 to build a car in Germany, ship it to the United States and earm a normal profit during the year, the value of the Euro moves from USD0.67 to USD0.72. 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