Q:14

Q:7

Q:5

14 Nouf plans to visit London in six months to visit a friend. Nouf expects to incur the total cost of pound 10,000 for meals and transportation during your stay. As of today, the spot exchange rate is $1.60/E and the six-month forward rate is $163/. You can buy the Six-month call option on with the exercise rate of $1.64/8 for the premium of $0.10 per E. Assume that your expected future spot exchange rate is the same as the forward rate. The Six-month interest rate is 8 percent per annum in the United States and 6 percent per annum in UK, Nouf expected dollar cost of buying 10,000 If she chooses to hedge via call option on will be 08:29 Multiple Choice 0 $17340 O $18400 $19000 O 0 $20000 7 Currently, the spot exchange rate is $1.50/and the six-month forward exchange rate is $1.62/8. The six-month interest rate is 10.0% per annum in the U.S. and 8% per annum in the U.K. Assume that you can borrow as much as $1,600,000 or 1,000,000. Calculate the Arbitrage profit will be? 01:59:03 Multiple Choice 3800 4800 5800 There is no Arbitrage if S ($/) = 1.3158 and S($/) =1.1233 then the (/) cross rate can be calculated from the American quotations 5 Multiple Choice 8 01:59:11 11714 1.2345 1.3345 1.4542