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Jenny has bought 10 six-month Japanese yen call options (1,000,000 yen per option) with a striking price of 95 cents per 100 yen. The premium
Jenny has bought 10 six-month Japanese yen call options (1,000,000 yen per option) with a striking price of 95 cents per 100 yen. The premium is 1.5 cents per 100 yen. The spot rate is 93.28 cents per 100 yen. Jenny believes the yen will appreciate over the next six months. a) Determine Jenny's profit loss if the yen appreciates to $1.00/100 yen. The profit/loss will be USD. (fill in negative value if loss and round to integer USD) b) Determine Jenny's profitloss if the yen depreciates to 93 cents per 100 yen. Since the option expires (fill in "out of the money" or "in the money"), the profit/loss will be USD. (fill in negative value if loss and round to integer USD) c) Determine the future spot price at which Jenny will only break even. The break-even spot price is cents per 100 yen. (round to 1 decimal)
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