TI) Assume the spot exchange rate for the Hungarian forint is 267.767 HUF. Also assume the inflation rate in the United States is 1.6 percent per year while it is 3.5 percent in Hungary. What is the expected exchange rate three years from now? A) 272.855 HUF B) 262.679 HUF C) 259.406 HUF D) 283.322 HUF E) 252.792 HUF 12) The one-year call on TLM stock with a strike price of S65 is priced at $2.20 while the one-year put with a strike price of $65 is priced at $11.18. The annual risk-free rate is 3.8 percent, compounded continuously. What is the current price of TLM stock? A) $47.65 B) $48.90 C) $53.60 D) $50.10 E) $56.70 13) Today, Ted purchased 500 shares of ABC stock at a price of $42.20 per share. He also purchased five put option contracts on ABC at a price of S.10 per share, an exercise price of $40 and a 1-year term. What is the maximum loss Ted can realize on his investments over the next year? A) -$1,150 B) -$1,105 C) -$1,050 D) SO E) -$1,115 14) This morning a national bakery agreed to pay a farmer $7.10 a bushel for 5,000 bushels of wheat that the farmer will deliver to the bakery four months from now. Payment will be made at the time of delivery. What is this legally binding agreement called? A) Forward contract B) Swap C) Call option contract D) Snot contract