> 888880 100000 1000 0889988 0889990 28898800 8888888 3888900g 98989999 = OOOO Question 12 - (12 points) points) You buy 100 currency put options on the euro (EUR) with a strike price of 1.20 USD/EUR. Each option is for 1000 euros. The options have a maturity of one year. Are you more likely to make money on the put options if the Euro appreciates or depreciates against the dollar? Why? b) (3 points) The exchange rate is 1.15 USD/EUR in one year. Do you exercise the put options? If so how much money did you make from exercise? Did you make a profit? c) (3 points) Assume that instead of buying the put option you had taken a short position in a futures contract to sell euro for 1.20 USD/EUR in one year. Each futures contract is for 1000 euros and you are short 100 contracts. What are the advantages and disadvantages of this position relative to buying the put option as in (a)? Discuss. d) (3 points) A customer will pay you 1600 Euros in one year. Can you fully hedge this exposure using the contracts above? Explain. If not explain what contract you would need to fully hedge your exposure