S₀ = $1.0680/SF; X = $1.0820/SF; E(S_3mon) = $1.0450/SF;

C_0(3mo) = $0.0128/SF; P_0(3mo) = $0.0146/SF

1. Assume that the speculator in the above question buys 45 call option contracts on the SF (SF62,500/CT). If by the end of the three months period the Swiss franc ends up at $1.0630/SF. Calculate the total gain or loss that she would end up with.

$36,000.00 loss

$89,437.50 loss

$55,406.25 loss

$14,062.50 loss

2.Now assume that the speculator starts with $45,625 that she uses to buy put options. How many contracts can she buy rounded to the nearest full number of contracts?

One contract

50 contracts

3,125,000 contracts

42,167 contracts

3.Now assume that the speculator bought 45 put contracts and the spot price three months later ended up at $1.1046/SF, how much would the total payoff for the speculator be?

$63,562.50

$0.00

- $63,562.50

- $41,062.50

$22,500.00