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5. (3 points) According to the table below, what is the direct quote of the spot dollar- pound exchange rate, from the U.S. perspective? Country
5. (3 points) According to the table below, what is the direct quote of the spot dollar- pound exchange rate, from the U.S. perspective? Country Britain (Pound) 62,500 1 Month Forward 3 Months Forward 6 Months Forward 12 Months Forward U.S. $ equiv. Tuesday 1.6000 1.6100 1.6300 1.6600 1.7200 Currency per U.S. $ Tuesday 0.6250 0.6211 0.6173 0.6024 0.5814 a. 1.00 - $1.60 b.1.00 = $1.66 c. $1.00 - 10.6211 d. $1.00 = 80.6250 13. (3 points) You bought a call option on euros with an exercise price of $1.25/. Suppose that the $-E spot exchange rate today is $1.20/. The call option premium today is $0.15/. What are the intrinsic value and time value of the call option today? a. Intrinsic value = $0.05/, time value = $0.10/. b. Intrinsic value = -$0.05/, time value = $0.20/. c. Intrinsic value = 0, time value=0. d. Intrinsic value = 0, time value = $0.15/
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