James Howlett is looking to enhance his yield on his existing Singapore Dollars (SGD) via a dual currency investment. He holds the view that SGD is likely to weaken over the next 6 months and is looking at a 3-month investment tenor and amount of SGD100,000. Specifically, he is of the view that the Australian Dollars (AUD) has weaken sufficiently and should offer upside against SGD. He received the following indications by his banker. 3 months Call Option (200pips away) on AUDSGD 3 months Put Option (200pips away) on AUDSGD 3% per annum 4% per annum Current AUDSGD Rate: 0.9950 (a) James's view is 200pips is a decent buffer to enter into a dual currency investment, what is option's strike price? (2 marks) (b) At maturity, AUDSGD is observed to be 0.9800, what currency and amount will James receive? Please show all workings. (4 marks)