Et You have $138,000 that you want to use to speculate in yen options. The spot rate is 0.00902/. You think that, at this rate, the yen is underpriced and, therefore, you expect it to substantially appreciate against the dollar in the coming few weeks. You decide to use your $138,000 to act on your expectations. The yen three-week calls and puts with an exercise price of $0.00870/ are selling for (i e. premiums are) $0.000924 and $0.00043/yen respectively. (Each yen contract calls for the exchange of 6.25 million yen) Would you buy yen call or put contracts? Explain your answer in your own words. How many contracts can you buy with the money you have? Assume that you buy 42 call contracts. If at the end of three weeks the spot rate is $0.00956/4, calculate your total payoffs and profit/loss from your investment. The dollar to the euro is quoted at $1.1260/ today. Put options on the euro with an exercise price of $1.1280/ and expiration in three months are selling for $0.0342/. Each option contract calls for the exchange of 62,500. You start with $160,000 (plus or minus enough dollars to round to nearest whole contract). If you buy the euro puts, how much premium do you pay per contract? How many put contracts can you buy? How much more money do you need to add to Cor keep from the $160,000 to round the number of contracts to the nearest whole number. If in three months, the exchange rate is $1.0890/. Would you exercise? What would be the total payoffs? What would be the total profits losses