Question
7. Jason purchased a call option on Swiss Franc for $0.69 per unit. The strike price was $1.28 and the spot rate at the time
7. Jason purchased a call option on Swiss Franc for $0.69 per unit. The strike price was $1.28 and the spot rate at the time the option expired was $1.76. Each SF option contract has 20,000 units. Would Jason exercise this option or not? What was Jasons net profit on this call option?
a. -$4,200 b. $4,200 c. $5,600 d. $5,600
8. Kevin purchased a put option on Yen for $0.006 per unit. The strike price was $0.152 and the spot rate at the time the option expired was $0.115. Each Yen option has 20,000 units. Would Kevin exercise this option or not? What was Kevin net profit on the option?
a. $120 b. -$120 c. $620 d. -$620
9. The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option?
a. $8.12 b. $8.55 c. $9.00
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