5 1 pts Question 28 ments sions at Online Ori on One year ago, you sold a put option on 100.000 euros with an expiration date of one year. You received a premium on the put option of $.05 per unit. The exercise price was $1.24. Assume that one year ago, the spot rate of the euro was $1.20. From one year ago to today, the euro depreciated against the dollar by 10 percent. Today the put option will be exercised (if it is feasible for the buyer to do so). The total dollar amount of your profit or loss is $__(negative number indicates a loss). 365 e Drive 13000 -14000 - 15000 15000 OO 10000 11000 - 12000 11000 12000 - 13000 14000 -10000 Attempt 1 Hour One year ago, you sold a futures contract on 100.000 euros with a settlement date of one year. Assume that one year ago, the spot rate of the euro was $1.50, the one-year forward rate exhibited a discount of 5 percent, and the one-year futures price was the same as the one-year forward rate. From one year ago to today, the euro depreciated against the dollar by 10 percent. The total dollar amount of your profit or loss is $.__(negative number indicates a loss). -7000 7500 6000 8000 -7500 -6000 -8000 -6500 6500 7000 We'R'Scared, a US-based MNC, will need 500,000 a year from now, and decides to lock into a rate of 2$/ (which happens to be the current spot price) and purchase a futures contract right now (assume a single contract with a size of 500,000). The initial margin on the contract is 10%, and the maintenance margin is 5%. On the first day of the contract, the pound loses $0.04 in the spot market, and drops to $1.96. It continues to lose $0.04 per day for the next 10 days. We'R'Scared will receive the first margin call equal to $ 10000 70000 30000 80000 40000 60000 50000 100000 90000 20000 Ori We'R'Scared, a US-based MNC, will need 500,000 a year from now, and decides to lock into a rate of 2$/ (which happens to be the current spot price) and purchase a futures contract right now (assume a single contract with a size of 500,000). The initial margin on the contract is 10%, and the maintenance margin is 5%. On the first day of the contract, the pound loses $0.04 in the spot market and drops to $1.96. It continues to lose $0.04 per day for the next 10 days. We'R'Scared will receive the first margin call at the end of day. 4 1 5 7 B 3 2 9 6 10 Question 24 1 pts Montenegro unilaterally (without EU's approval) switching to Euro as its currency is an example of Sterilized intervention Snake mechanism Non-sterilized intervention Gold standard Eurofication None of the listed Dollarization Which of the following is NOT a reason why governments intervene in currency markets: Ori- Smooth exchange rate movements Establish implicit boundaries Respond to temporary disturbances Spend excess reserves of a foreign currency No exception, all of the listed are reasons why governments intervene in currency markets Reduce volatility Question 19 1 pts Tim Atter 1 He You sold a put option on Swiss Francs for $.03 per unit. The strike price was $.78, and the spot rate at the time when the option was expiring was $.73. Assume you immediately sold off the Swiss Francs received if the option was exercised. Also assume that there are 10.000 units in a Swiss Franc option. Your net profit/loss (negative number means a loss) on the option was dollars. 300 -100 -300 200 0 -200 e 100