PLEASE ANSWER BLUE QUESTIONS AND SHOW WORK THANK YOU

Assume Hans believes the spot rate will decrease in 3 months.

current spot rate: $0.5851/SFr

strike rate: $0.5850/SFr

Standard Contract Size: SFr62,500

Hans E[S₉₀] rate: $0.5500/SFr

Hans Premium rate: $0.0050/SFr

Actual Spot(90): S₉₀ ?

a) What does Hans want the relationship of the spot rate and strike price at maturity?

Spot ___strike.

b) What are the positions on the important dates? (i.e., what does Hans do?)

Position on:

Day 1:

Day 90: If S₉₀= $0.5950/SFr, then Hans (explain as though Hans is uncovered)

CALL OPTION/WRITER Profit formula:

Profit = Premium (Spot rate - Strike price)

=

=

In dollar terms:

c) What if the spot

Assume Hans believes the spot rate will decrease in 3 months. a) What does Hans want the relationship of the spot rate and strike price at maturity? Spot strike. b) What are the positions on the important dates? (i.e., what does Hans do?) Position on: Day 1: Day 90: If S90=$0.5950/SFr, then Hans (explain as though Hans is uncovered) CALL OPTION/WRITER Profit formula: Profit=Premium(SpotrateStrikeprice)= In dollar terms: c) What if the spot