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PLEASE HELP ASAP, THANK YOU, UPVOTE WILL BE GIVEN An investor takes the following yen option positions simultaneously: buy a call option with a strike
PLEASE HELP ASAP, THANK YOU, UPVOTE WILL BE GIVEN
An investor takes the following yen option positions simultaneously: buy a call option with a strike price of $0.00774/ and a premium of $0.045/ sell a call with a strike price of $0.00946/ and a premium of $0.036/. If the spot price is ultimately $0.0086/4, what would be the investor's profit/loss in $ per at maturity? a. $-0.0081 b. $0.0099 c. None of the options d. $-0.0073 O e. $-0.01 ChesLover, an Australian chestnut grower is looking to grow the delicious nut on a 200 acre property in Brazil. The estimated cash flows from the project is as follows (in millions of real): Year 1 40 Year 2 90 Year 3 130 Year 4 165 The investment has an initial up-front cost of R$101 million, and the cost of capital is 17%. You however expect that there is a 32% chance in any given year that the investment will be expropriated by the Brazil government. If the investment is expropriated, you don't earn anything. To protect the investment against the risk of expropriation, you can buy insurance for R$6 million, payable at the beginning of each year that you want to cover. If you hold insurance and the investment is expropriated, you will receive R$32.31 million in payment. What is the NPV of the investment in real if you decide to buy the insurance every year? Select one: a. R$9 million O b. None of the options O C. R$2.998 million d. - R$62.25 million e. R$8.314 million Of. R$35.158 million One-Punch man needs 21 million in 8 months for a 2-month period to finance a sushi restaurant in City Z. He wants to lock in the rate for a Euroyen loan over the borrowing period today. Below are the current annualized Euroyen loan rates for different periods: 2-month: 5.4% 8-month: 6% 10-month: 6.9% What is the interest rate (annualized) One-Punch man can lock in based on these rates through money market transactions? a. None of the options b. 1.274% c. 7.054% d. 5.40% e. 10.096% f. 4.807%Step by Step Solution
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