Consider a 9-month futures contract on USD/EUR. LIBOR (USD) and EURIBOR (EUR) rates are 4.2% and 6%, respectively (both interest rates are annual rates). The current spot rate is 1.42($/euro). What is the futures price ($/euro)? (Keep in mind that the time to maturity equals 9 months or 0.75 years)

A) 1.4312

B) 1.4456

C) 1.4016

D) 1.5876

Consider the graph of a call option shown below. The option is a three-month American call option on 62,500 with a strike price of $1.50 = 1.00, that is, $1.50 per euro, and an option premium of $3,125 (for the full size position of the option). What are the values of A, B, and C, respectively?

A.	A = -$3,125 (or -$.05 depending on your scale); B = $1.50; C = $1.55

B.	A = -3,750 (or -.06 depending on your scale); B = $1.50; C = $1.55

C.	A = -$.05; B = $1.55; C = $1.60

D.	none of the above

E denotes the strike or exercise price below. For an American call option, A and B in the graph are

A.	time value and intrinsic value.

B.	intrinsic value and time value.

C.	in-the-money and out-of-the money.

D.	none of the above

The /$ spot exchange rate is $1.50/ and the 120 day forward exchange rate is 1.45/. The annualized forward premium (discount) is

A. the dollar is trading at an 8% premium to the euro for delivery in 120 days.

B. the dollar is trading at a 5% premium to the Swiss franc for delivery in 120 days.

C. the dollar is trading at a 10% discount to the euro for delivery in 120 days.

D. the dollar is trading at a 5% discount to the euro for delivery in 120 days