please answer questions 1-3

QUESTION 1

1. XTA corp exports products to a French firm and will receive payment of 900,000 in six months. On March 1, the spot rate of the euro was $1.18, and the 3-month forward rate was $1.07. On Sept. 1, XTA negotiated a forward contract with a bank to sell 900,000 forward in six months. The spot rate of the euro on September 1 is $1.05. XTA corp will receive $____ for the euros.

   	a.	930,000
   	b.	963,000
   	c.	945,000
   	d.	1,062,000

1.5 points

QUESTION 2

1. Assume that a speculator purchases a put option on British pounds (with a strike price of $1.10) for $.07 per unit. A pound option represents 31,250 units. Assume that at the time of the purchase, the spot rate of the pound is $1.10 and continually rises to $1.12 by the expiration date. The highest net profit possible for the speculator based on the information above is:

   	a.	$1,250.00.
   	b.	$2,187.50
   	c.	$625.00.
   	d.	$2,187.50.

1.5 points

QUESTION 3

1. A firm wants to use an option to hedge 2.5 million in Swiss Franc receivables from Switzerland. The premium is $.05. The exercise price is $.75. If the option is exercised, what is the total amount of dollars received (after accounting for the premium paid)?

   	a.	$1,250,000
   	b.	$1,875,000
   	c.	$1,750,000
   	d.	$2,000,000