Question 1 Part B: (5 marks) Note that Part A and B are not related. The table below shows the premiums for several currency options (all the options are maturing in 9 months): Call on SGD Put on SGD Option strike price GBP 0.55 for 1 SGD GBP 0.0641 GBP 0.0207 Option strike price GBP 0.65 for 1 SGD GBP 0.0203 GBP 0.0746 The spot currency rate on the day when all the above options are priced is GBP 0.58 for 1 SGD. i. Calculate the current premium for a 9-month maturity call option on GBP with strike price of GBP 0.55 for 1 SGD. Show your working. [3 marks) Suppose that you hold the call option on GBP specified in part (i) above until maturity. On maturity, the spot currency rate is GBP 0.52 for 1 SGD. What is your terminal payoff? [2 marks] Question 1 Part B: (5 marks) Note that Part A and B are not related. The table below shows the premiums for several currency options (all the options are maturing in 9 months): Call on SGD Put on SGD Option strike price GBP 0.55 for 1 SGD GBP 0.0641 GBP 0.0207 Option strike price GBP 0.65 for 1 SGD GBP 0.0203 GBP 0.0746 The spot currency rate on the day when all the above options are priced is GBP 0.58 for 1 SGD. i. Calculate the current premium for a 9-month maturity call option on GBP with strike price of GBP 0.55 for 1 SGD. Show your working. [3 marks) Suppose that you hold the call option on GBP specified in part (i) above until maturity. On maturity, the spot currency rate is GBP 0.52 for 1 SGD. What is your terminal payoff? [2 marks]