QUESTION 19 Which of the follow options strategies are consistent with the belief that the underlying asset prices will be stable? Selling a call and buying a put Buying a call and buying a put Buying a call and selling a put QUESTION 20 The /$ spot exchange rate is $1.50/ and the 120-day forward exchange rate is 1.45/. The forward promium (discount) is the dollar is trading at an 8% premium to the euro for delivery in 120 days. the dollar is trading at a 10% discount to the euro for delivery in 120 days. the dollar is trading at a 5% discount to the ouro for delivery in 120 days. QUESTION 21 You are a US-based financial manager with $1M to invest. The dollar-euro exchange rate is quoted as $1,50 = 1.00 and the dollar po exchange rate is quoted at $2.00 - 21.00. If a bank quotes you a cross rate of 1.00 = 1.25. Is there an arbitrage opportunity for this market? Yes the market can be arbitraged. No arbitrage is possible. Not enough information is given