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Spot: NOK 8.0000/USD Forward: NOK 8.2000/USD 12-month USD Libor: +2.00% 12-month NOK Libor: +8.00% WACC: 10.00% Call option: strike price USD 0.125/NOK, premium USD 0.0025/NOK

Spot: NOK 8.0000/USD

Forward: NOK 8.2000/USD

12-month USD Libor: +2.00%

12-month NOK Libor: +8.00%

WACC: 10.00%

Call option: strike price USD 0.125/NOK, premium USD 0.0025/NOK

Put option: strike price USD 0.125/NOK, premium USD 0.0035/NOK

you have just invested usd 1M in the carry "carry trade".(you have borrowed usd 1M and you have invested in NOK). what will be your profit/loss if the exchange rate is NOK 8.7/USD one year from now?

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