Hello,

Please provide details for the answers.

Thank you!

3. A put option on British pounds has a strike (or exercise) price of $1.60/BP and the put premium per British pound is $0.03. If he spot FX rate at the expiration date is $1.55/BP, what would be the net profit of this put option holder. (calculate the net profit calculation & draw a net profit graph precisely) 0.02 4. US one year interest rate is 6% annual and EU one year interest rate is 8% annual. Currently the spot rate in the market is $1.12/Euro. According the International Fisher Effect, what is your prediction about the value of euro against US$ after one year Calculate the future spot rate in a year and justify your answer based on the theory. $1.096/euro 5. If the inflation rate in the U.K. is higher than the inflation in the U.S. by 2%, the relative PPP theory would predict that the British pound would against US$ by_%. (Long term) -2%