Q1: You are a speculator (trader) for a hedge fund, Quoll Capital. Today, you believe that the British pound (GBP) will appreciate against the US dollar (the spot exchange rate is quoted as the number of USD per GBP) over the next one month. You decide, today, to trade according to this view. What is the best trading strategy to implement this view? Pick the best choice. a. Buy a one month put option on GBP. b. Buy a one month call option on GBP. c. Sell a one month call option on GBP. d. Telephone Oliver the Finance Pug and ask him for the answer! Q2: Helen is a trader (speculator) for a hedge fund, Sydney Capital. Today, the spot exchange rate for the number of USD per EUR is 1.4200. Today, Helen buys a 2 week put option on EUR, with a strike of 1.4100, for a price of 0.022 USD per EUR which she holds until expiry. On the expiry date, the spot exchange rate for the number of USD per EUR turns out to be 1.3700. What is Helen's net profit or loss from this trading position? Take into account the price Helen paid for the option but neglect the time value of money. Pick the correct answer. a. Helen made a loss of 0.022 USD per EUR. b. Helen made a loss of 0.028 USD per EUR. c. Helen made a loss of 0.033 USD per EUR. d. Helen made a loss of 0.050 USD per EUR. e. Helen broke even (profit = 0). f. Helen made a profit of 0.010 USD per EUR. g. Helen made a profit of 0.018 USD per EUR. h. Helen made a profit of 0.022 USD per EUR. i. Helen made a profit of 0.028 USD per EUR. j. Helen made a profit of 0.050 USD per EUR. k. Only Oliver the Finance Pug knows!

Q1: You are a speculator (trader) for a hedge fund, Quoll Capital. Today, you believe that the British pound (GBP) will appreciate against the US dollar (the spot exchange rate is quoted as the number of USD per GBP) over the next one month. You decide, today, to trade according to this view. What is the best trading strategy to implement this view? Pick the best choice. a. Buy a one month put option on GBP. b. Buy a one month call option on GBP. c. Sell a one month call option on GBP. d. Telephone Oliver the Finance Pug and ask him for the answer! - Q2: Helen is a trader (speculator) for a hedge fund, Sydney Capital. Today, the spot exchange rate for the number of USD per EUR is 1.4200 . Today, Helen buys a 2 week put option on EUR, with a strike of 1.4100 , for a price of 0.022 USD per EUR which she holds until expiry. On the expiry date, the spot exchange rate for the number of USD per EUR turns out to be 1.3700. What is Helen's net profit or loss from this trading position? Take into account the price Helen paid for the option but neglect the time value of money. Pick the correct answer. a. Helen made a loss of 0.022 USD per EUR. b. Helen made a loss of 0.028 USD per EUR. c. Helen made a loss of 0.033 USD per EUR. d. Helen made a loss of 0.050 USD per EUR. e. Helen broke even (profit =0 ). f. Helen made a profit of 0.010 USD per EUR. g. Helen made a profit of 0.018 USD per EUR. h. Helen made a profit of 0.022 USD per EUR. 1. Helen made a profit of 0.028 USD per EUR. 1. Helen made a profit of 0.050 USD per EUR. k. Only Oliver the Finance Pug knows