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Companies choose to invest in foreign markets for a number of reasons, often the same reasons for expanding their operations within their home country. Explain

  1. Companies choose to invest in foreign markets for a number of reasons, often the same reasons for expanding their operations within their home country. Explain TWO (2) reasons why MNC may invest funds in a financial market outside its own country. (10 marks)

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(b) Show the diagram/graph of LONG call to support your answer in (a). (10 marks)

You are bullish on the USD and decide to long call position with exercise price rate CAD1.30 and premium rate at CAD0.04 (a) Calculate the payoff for the range of spot price. Complete the table below

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