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An Investor is bullish on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call option on the

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An Investor is bullish on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call option on the euro with a strike price (exchange rate) of 125/. When the investor purchases the contract, the spot rate of the euro is equivalent to 126/. Assume the euro's spot price at the expiration date (market price) is $135/, the premium is V a) Assume the euro's spot price at the expiration date (market price) is $135/ The investor's profit \/ b) Assume the euro's spot price at the expiration date market price) is W122/ The investor's profit= WE c) What is the maximum loss Maximum loss WE An investor is bearish on the euro and believes it will decrease against the Japanese Yen. The investor purchases a currency put option on the euro with a strike price (exchange rate) of 131/. When the investor purchases the contract, the spot rate of the euro is equivalent to 132/. the premium is 1/ a) Assume the euro's spot price at the expiration date market price) is 125/ The investor's profit VI b) Assume the euro's spot price at the expiration date (market price) is $137/ The investor's profit c) What is the maximum loss Maximum loss VE d) What the maximum profit Maximum profit - HD WE

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