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Assume that you have just purchased Canadian dollar call options for speculative purposes. If these options are exercised, you will immediately sell the Canadian dollars

Assume that you have just purchased Canadian dollar call options for speculative purposes. If these options are exercised, you will immediately sell the Canadian dollars in the spot market. Each option was purchased for a premium of $.03 per unit, with an exercise price of $.75. You will exercise the options at that time only if it is feasible to do so. In the following table, fill in the net profit (or loss) per unit based on the listed possible spot rates of the Canadian dollar on the expiration date.
\table[[\table[[Spot Rate of Canadian],[Dollars]],\table[[Exercises],[your options?],[(Yes or No)]],Profit/Loss,Briefly Explain Profit/loss],[0.60,,,],[0.70,,,],[0.75,,,],[0.76,,,],[0.78,,,],[0.80,,,]]
Assume that the U.S. inflation rate becomes high relative to inflation in China. Other things being equal, how should this affect the (a) the U.S. demand for Chinese RMB,(b) the supply of Chinese RMB for sale, and (c) the equilibrium value of the Chinese RMB?(You need to show the movement in a graph)
Assume that the Japanese government relaxes its controls on imports by Japanese companies. Other things being equal, how should this affect the (a) the U.S. demand for Japanese yen, (b) the supply of yen for sale, and (c) the equilibrium value of the yen? (You need to show the movement in a graph)
You expect that the Country XYZ's dollar will depreciate against the U.S. dollar from its spot rate of $.43 to $.42 in 60 days. The following interbank lending and borrowing rates exist:
\table[[,Lending Rate,,Borrowing Rate],[U.S. dollar,7.0%,,7.2%
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