QUESTION 8 According to the interest parity condition, if the domestic interest rate is 12 percent and the foreign interest rate is 10 percent, then the expected of the foreign currency must be percent. depreciation; 4 appreciation; 2 appreciation; 4 depreciation; 2 QUESTION 9 On 01.10.2013, the apple share price is $610 and the call option with exercise price $610 and exercise date 01.11.2013 is $10. With $610 you can buy exactly [A] apple share(s). If the share price increases to $630 on the 01.11.2013 you would have made $ [B] profits. If the share price decreases to $600 you would have made $ [C] losses. Alternatively, you could have bought [D] call options with $610. If the share price increased to $630 these call options would have resulted in a profit (net of buying outlays) of $ [E]. However, if the share price would have decreased to $600, you losses would have been exactly $ [F]. What are the values of C and E? 1,610 1,61 20,61 10,610