Assume that a put option has an exercise price of $1.50/. At a spot price of $1.45/, the put premium is $0.15/. The option has _______________.

a. a time value of $0.15.

b. a time value of $0.10.

c. an intrinsic value of $0.15.

d. an intrinsic value of $0.10.

The table below shows the call and put prices at various strike prices for the Australian

dollar on February 2, 2015 for maturity in March 2015 (The underlying asset is the Mar15

Australian futures contract, so it has the same maturity date as the Mar15 Australian dollar

futures). The option contract size is AUD$100,000 per contract. The prices in the table are

in dollars per AUD$ (for example, 0.0298 means $0.0298/AUD$). The strike price of

"7550" should read as $0.7550/AUD$.

Call StrikePrice Put

0.0298 7550 0.0063

0.0261 7600 0.0076

0.0226 7650 0.0091

0.0193 7700 0.0108

0.0164 7750 0.0129

0.0136 7800 0.0151

0.0112 7850 0.0177

0.0091 7900 0.0206

0.0073 7950 0.0238

0.0057 8000 0.0272

If you have to fulfill your debt obligation of AUD$1,000,000 in March 2015 (on the same

date as the maturity date of the options), and you decide to use an option with a strike price

of "7600" to hedge your position. What is the maximum potential cost per AUD$ when

purchase AUD$ at maturity?

Your answer: $________________/AUD$

(Keep four decimals; Do not include currency symbols in your answer)