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The second picture above is an example, but the actual question is on the first picture. Solve for Kiko's profit or loss at maturity if
The second picture above is an example, but the actual question is on the first picture. Solve for Kiko's profit or loss at maturity if the ending spot rate 130/$ is
option is for 12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are 110,114,120,124, 130, 136, and 141 per dollar? Kiko's profit or loss at maturity if the ending spot rate is 110/$ is $ Kiko's profit or loss at maturity if the ending spot rate is 114/$ is $ Kiko's profit or loss at maturity if the ending spot rate is 120/$ is $ Kiko's profit or loss at maturity if the ending spot rate is 124/$ is $ Kiko's profit or loss at maturity if the ending spot rate is 130/$ is $ (Round to the nearest cent and indicate a loss by using a negative sign.) (Round to the nearest cent and indicate a loss by using a negative sign.) (Round to the nearest cent and indicate a loss by using a negative sign.) (Round to the nearest cent and indicate a loss by using a negative sign.) (Round to the nearest cent and indicate a loss by using a negative sign.) First, calculate the ending spot rate in $ using the following formula: Endingspotratein$/=Endingspotrate(/$)1 Endingspotratein$/=108/$1=$0.009259/ Next, calculate the gross profit using the following formula: Gross profit = Strike price - Ending spot rate ($/) If the answer is negative, then the gross profit is $0.00. Gross profit =$0.008000/$0.009259/=$0.000000/ Then, calculate the net profit using the following formula: Net profit = Premium - Gross Profit Net profit =$0.000080/$0.000000/=$0.000080/Step by Step Solution
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