Options

1. You are to receive 125,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. If a (put or call?) option (125,000) cost $1,500 what is the least you will receive for selling your euros (net of the option cost) for dollars? (You buy the put for $1,500 and exercise it by selling the euros at $1.19 if the market price of the euro is less than $1.19.) Give answer is total dollars and in dollars per euro.

2. You are to pay 125,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. If a (put or call?) option (125,000) cost $1,500 what is the most you will pay for buying your euros (net of the option cost) with dollars? Give answer is total dollars and in dollars per euro.

3. You are to receive 145,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. A (put or call?) option (125,000) cost $1,500. In 3 months the spot (market) price on the euro is $1.16. What is the least you will receive for selling your euros (net of the option cost) for dollars? (You buy the put for $1,500 and exercise it by selling the euros at $1.19 if the market price of the euro is less than $1.19.) Give answer is total dollars and in dollars per euro.

4. You are to pay 145,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. A (put or call?) option (125,000) cost $1,500. In 3 months the spot (market) price on the euro is $1.16. What is the most you will pay for buying your euros (net of the option cost) with dollars? Give answer is total dollars and in dollars per euro.

Futures

5. You are to receive 145,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. You enter into a futures contract (125,000) to sell euros at the $1.19 forward price. In 3 months the spot (market) price on the euro is $1.16. What is the net amount you receive for selling your 145,000? Give answer is total dollars and in dollars per euro.

6. You are to pay 145,000 in 3 months and todays spot price is $1.17, but the 3 month forward rate is $1.19. You enter into a futures contract (125,000) to buy euros at the $1.19 forward price. In 3 months the spot (market) price on the euro is $1.16. What is the amount you pay for buying your 145,000? Give answer is total dollars and in dollars per euro.