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Can you please answer the hand written question at the top of the page. You work as a senior currency trader for Green Valley Capital
Can you please answer the hand written question at the top of the page.
You work as a senior currency trader for Green Valley Capital Limited. The CEO, Selena Cruz, is fairly confident that the US significantly against the British Pound as the US interest rates will rise much less than anticipated in the next 60 days. So, she informs you to develop some speculation strategies with the use of Pound futures and options with the following information: Current spot rate $ 1.20/2 60-1)a p o tio n un t e pri 60-Day call option on Pound o Strike price S 1.25/ E 60-Day futures rate S 1.23/ e - $ .06/C Premium $ 0.05/2 Assume each futures and option contracts are for E 10,000. Selena wants you to answer the following questions and calculate all speculation profits in US Dollar, based on one futures/option contract.
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