5 6 4 6. The premium on a euro call option is s.02. The exercise price is S$1.32. The break-even point is13 for the buyer of the call, andVfor the seller of the call. (Assume zero transactions costs and that the buyer and seller of the put option are speculators) 7. Assume the following information: Current spot rate of Australian dollar Forecasted spot rate of Australian dollar 1 year from now 1-year forward rate of Australian dollar Annual interest rate for Australian dollar deposit Annual interest rate in the U.S .60 $.59 $.62 6% Given the information in this question, the return from covered initerest arbitrnge by U.S. investors with &. Assume the following information: You have $400,000 to invest: Current spot rate of Sudanese dinar (SDD) 90-day forward rate of the dinar 90-day interest rate in the U.S. 90-day interest rate in Sudan .00570 $.00S60 4.0% 4,0% If you conduct covered interest arbitrage, what amount will you have after 90 days? -9. Assume the following information: Quoted Bid Price $0.67 $.074 Quoted Ask Price $0.69 $.077 Value of an Australian dollar (AS) in S Value of Mexican peso in S Value of an Australian dollar in Mexican pesos 8.2 8.5 Assume you have $100,000 to conduct triangular arbitrage. What will be your profit from implementing th strategy? Answer: 10. Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates: Switzerland 360-day borrowing rate 360-day deposit rate US. 7% 6% 5% 4% Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Par Company uses a money market hedge, it will receive in 360 days