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Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $0.7007/S$. She has the following options on the Singapore
Singapore dollar will appreciate versus the U.S. dollar in the coming 90 days, probably to about $0.7007/S$. She has the following options on the Singapore dollar to choose from: a. Should Cece buy a put on Singapore dollars or a call on Singapore dollars? b. What is Cece's breakeven price on the option purchased in part a? c. Using your answer from part a, what is Cece's gross profit and net profit (including premium) if the spot rate at the end of 90 days is indeed $0.7007/S$? d. Using your answer from part a, what is Cece's gross profit and net profit (including premium) if the spot rate at the end of 90 days is $0.8003/SS? Data table Singapore dollars. This gives her the right to sell Singapore dollars at a future date at $0.6500/S$ each, and then immediately rebuy them in the open market at Singapore dollars. This gives her the right to buy Singapore dollars at a future date at $0.6500/S$ each, and then immediately resell them in the open market at Singapore dollars. This gives her the right to buy Singapore dollars at a future date at $0.7007/$ each, and then immediately resell them in the open market at a. Should Cece buy a put on Singapore dollars or a call on Singapore dollars? (Select the best choice below.) $0.6500/S$ each for a profit. (If her expectation of the future spot rate proves correct.) $0.7003/SS each for a profit. (If her expectation of the future spot rate proves correct.) $0.7003/S$ each for a profit. (If her expectation of the future spot rate proves correct.) $0.7003/S$ each for a profit. (If her expectation of the future spot rate proves correct.) b. Cece's breakeven price is $0.65046/S$. (Round to five decimal places.) c. Cece's gross profit, if the spot rate at the end of 90 days is $0.7003/S$, is $ ISS. (Round to five decimal places.) Cece's net profit (including premium), if the spot rate at the end of 90 days is $0.7003/S$, is $0.04984/S$. (Round to five decimal places.) d. Cece's gross profit, if the spot rate at the end of 90 days is $0.8004/S$, is $0.15040/$. (Round to five decimal places.) Cece's net profit (including premium), if the spot rate at the end of 90 days is $0.8004/$, is $0.14994/5$. (Round to five decimal places.)
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