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Matt works for a currency trader. He expects that the Australian dollar (AUD) will appreciate versus the U.S. dollar over the coming 90 days. The

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Matt works for a currency trader. He expects that the Australian dollar (AUD) will appreciate versus the U.S. dollar over the coming 90 days. The current spot rate is $0.5750 AUD. Matt has the following options available based on the Australian dollar as shown in Table 6.1 Table 6.1. Australian Dollar Current spot rate (USS/AUD Days to maturi S0.5750 90 tion choices on the AUD Strike price (USS/AUD Premium (US$/AUD Call option $0.6000 $0.0149 Put option $0.6000 S0.0004 A. Which option should Matt buy? B. What is Matt's breakeven price on the option purchased? C. What is Matt's gross profit and net profit (including premium) if the ending spot rate is $0.6600/AUD? D. What is Matt's payoff if the spot rate is S0.5550 AUD

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