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Mr. Ben is a speculator, who invests in options. The current spot rate is TL 5.96 / and he believes that Euro will be around
Mr. Ben is a speculator, who invests in options. The current spot rate is TL 5.96 / and he believes that Euro will be around TL 6.10/ in the coming 90 days. Using the option quotations below, answer the following questions. 90 Days options: CALL OPTION PUT OPTION Strike Price Premium TL 5.98/ TL 0.001/ TL 5.98/ TL 0.003/ a) Which of the given options should Mr. Ben buy according to his estimations? Why? b) Using your answer to part (a), Calculate Mr. Ben's profit/loss if the spot rate at the end of 90 days is TL5.97/ c) Using your answer to part 'a', what is the break-even spot rate for Mr. Ben at the maturity date (20 Points)
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