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Problem 7-11 (algorithmic) Question Help Calandra Panagakos at CIBC. Calandra Panagakos works for CIBC Currency Funds in Toronto, Calandra is something of a contrarian-as opposed
Problem 7-11 (algorithmic) Question Help Calandra Panagakos at CIBC. Calandra Panagakos works for CIBC Currency Funds in Toronto, Calandra is something of a contrarian-as opposed to most of the forecasts, she believes the Canadian dollar (C$) will appreciate versus the U.S. dollar over the coming 90 days. The current spot rate is $0.6751/CS. Calandra may choose between the following options on the Canadian dollar a. Should Calandra buy a put on Canadian dollars or a call on Canadian dollars? b. What is Calandra's breakeven price on the option purchased in part a? c. Using your answer from part a, what is Calandra's gross profit and not prolit (including premium) if the spot rate at the end of 90 days is indeed 50.7605/CS? d. Using your answer from part a, what is Calandra's gross profit and net profit including premium) if the spot rate at the end of 90 days is $0.825110$ a. Should Calandra buy a put on Canadian dollars or a call on Canadian dollars? (Select the best choice below.) A. Since Calandra expects the Canadian dollar to appreciate versus the US dollar, she should buy a call on Canadian dollars O B. Since Calandra expects the Canadian dollar to appreciate versus the US dollar, she should buy a put on Canadian dollars. O C. Since Calandra expects the Canadian dollar to depreciate versus the US dollar, she should buy a put on Canadian dollars. OD. Since Calandra expects the Canadian dollar to depreciate versus the US dollar, she should buy a call on Canadian dollars. Click to select your answer and then click Check Answer b 5 remaining parts Clear All Final Check 2009011-11060.***** : W dollars or a ca (Click on the icon to import the table into a spreadsheet.) O an dollar to ap Tian dollar to a lian dollar to de dian dollar to de Option Put on C$ Call on C$ Strike Price $0.7003 $0.7003 Premium $0.00004/C$ $0.00047/C$ Print Done click Check Answer. Clear All
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