Q 1: A U.S. company, Grizzly Bear Inc, wants to use an option to hedge 12.5 million NZD (New Zealand dollars) in receivables from New Zealand firms. What type of option (put or call on NZD) does Grizzly Bear Inc need to buy? The premium on the option is $.03 (meaning, in long hand, that the option premium is 0.03 USD per NZD). The exercise price is $.55 (meaning, in long hand, that the exercise price is 0.55 USD per NZD). If the option is exercised, what is the total (net) amount of U.S. dollars received (after accounting for the premium paid - but ignore the time value of money on the premium) by Grizzly Bear Inc? Answer by selecting the best choice. A. Call option; the total (net) amount of U.S. dollars received =$6,875,000. B. Call option; the total (net) amount of U.S. dollars received =$7,250,000. C. Call option; the total (net) amount of U.S. dollars received =$7,000,000. D. Call option; the total (net) amount of U.S. dollars received =$6,500,000. E. Call option; the total (net) amount of U.S. dollars received =$6,250,000. F. Put option; the total (net) amount of U.S. dollars received =$6,875,000. G. Put option; the total (net) amount of U.S. dollars received =$7,250,000. H. Put option; the total (net) amount of U.S. dollars received =$7,000,000. 1. Put option; the total (net) amount of U.S. dollars received =$6,500,000. J. Put option; the total (net) amount of U.S. dollars received =$6,250,000. K. Only Oliver the Finance Pug knows. Carl is an option writer. In anticipation of a depreciation of the British pound from its current level of \$1.50 (i.e., USD 1.50=GBP1.00 ) to $1.45, he has written a call option with an exercise price of $1.51 and a premium of $.02 (i.e., USD 0.02 per GBP underlying). If the spot rate at the option's maturity turns out to be $1.54 (i.e., USD 1.54 = GBP 1.00 ), what is Carl's profit or loss in USD per GBP (assuming the buyer of the option acts rationally -- ignore the time value of money on the premium)? The answer should be negative if it is a loss. A. $0.01. B. $0.01. C. $0.04. D. $0.04. E. $0.03. F. $0.03. G. $0.02. H. Only Oliver the Finance Pug knows