The current spot exchange rate is $1.65=1.00 and the three-month forward rate is $1.50=1.00. Consider a three-month American put option on 62,500 with a strike price of $1.65=1.00. If you pay an option premium of $5,000 to buy this put, at what exchange rate will you break-even? $1.57=1.00$1.47=1.00$1.42=1.00$1.65=1.00 Consider the dollar-and euro-based borrowing opportunities of companies A and B. A is a U.S.-based MNC with AAA credit; B is an Italian firm with AAA credit. Firm A wants to borrow 1,000,000 for one year and B wants to borrow $2,000,000 for one year. Tile spot exchange rate is $2.00=1.00 and the one-year forward rate is given by CIP as $2.00?(1.09)/ 1.00?(1.06)=$2.3108/1. Is there a mutually beneficial swap? Yes,QSD=[7%6%]?$2.00/1.00($9%$9%)=$2%+$0%=$2%No,QSD=0Yes,QSD=1%=(7%6%)(9%9%)=1%(0%)Yes,QSD=[7%6%]($9%$9%)?1.00/$2.00=1%