Miss Yakahama is an FX trader at Numora Securities in Tokyo. She bought an AMERICAN USD PUT option with a strike price at 105.00/$, for which she paid a premium of 5.00. Which spot price maximizes her profit if she chooses to exercise the option before expiration?

	a.	105
	b.	95
	c.	110
	d.	100

Multinational corporations are exposed to large interest rate risk because they finance themselves with fixed and floating rate debt and they also earn interest in their cash assets. Please mark the only instrument that multinationals DO NOT used to hedge their interest rate risk.

	a.	A 6-12 FRA (forward rate agreement)
	b.	Only borrow in fixed interest rates to avoid having any exposure to interest rate risk
	c.	Being long or short an interest rate future contract
	d.	Swapping with a large international investment bank part of their floating interest rate exposure for fixed rate exposure or vice-versa.

An OTC (over-the-counter) contract to borrow or lend a notional principal amount at a pre-determined interest rate is called a/an:

	a.	forward rate agreement (FRA)
	b.	interest rate swap agreeemnt
	c.	interest rate receivable
	d.	interest rate future

A foreign currency ________ option gives the holder the right to ________ a foreign currency at a pre-determined quote, whereas a foreign currency ________ option gives the holder the right to ________ a foreign currency at a pre-determined quote.

	a.	call, swap, put, not exercise
	b.	put, sell, call, buy
	c.	put, not exercise, call, sell
	d.	put, buy, call, sell