QUESTION 4 Your Chief Financial Officer (CFO) is considering the purchase of five three-month Japanese yen call options with a striking price of 96 cents per 100 yen (A call option contract is equivalent to 6,250,000). The premium is 1.35 cents per 100 yen. The spot price is 95.28 cents per 100 yen and the 90-day forward rate is 95.71 cents. Your CFO believes the yen will appreciate to $1.00 per 100 yen over the next three months. As the CFO's assistant, you have been asked to prepare the following: 1. Determine the call option's profit if the yen appreciates to $1.00/100 yen. (8 marks) 2. Determine the call option's profit if the yen only appreciates to the forward rate. (8 marks) 3. Determine the future spot price at which the call option will only break even. (9 marks) [Total: 25 Marks)