The spot rate is 6.90 CNY/USD (.1449 USD/CNY). If China acts to increase the value of the Yuan, a profit can be made by owning a ___(1 or 2)_____option on the dollar?

1)call

2)put

b) Suppose the option price (premium) for both a call and a put (with exercise price of 6.90 CNY/USD) is .25 CNY. What is the break-even price?

c)Compute the profit (Yuan per Dollar) if the exchange rate is:

7.50 CNY/USD

7.00 CNY/USD

6.50 CNY/USD

6.00 CNY/USD