Use the following information to answer questions $32$ to $35$

$32.$ Should John buy a put option or call option on Canadian dollars?

A$.$ It$$s best to carry the transaction in the spot market

B$.$ Put

C$.$ Call

D$.$ A call and a put $($straddle strategy$)$

E$.$ None of the above

$33.$ What$$s John$$s break$-$even price on the option purchased?

A$.$ $$0\mathrm{.}7005$

B$.$ $$0\mathrm{.}6995$

C$.$ $$0\mathrm{.}6697$

D$.$ $$0\mathrm{.}7003$

E$.$ $$0\mathrm{.}7000$

$34.$ Calculate John$$s gross profit and net profit if after $3$ months, the spot rate is $$0\mathrm{.}7600/$C$

A$.$ Gross profit: $$0\mathrm{.}0600,$ Net Profit:$$0\mathrm{.}0597$

B$.$ Gross profit: $-$$$0\mathrm{.}0600,$ Net Profit:$-$$$0\mathrm{.}05951$

C$.$ Gross profit: $$0\mathrm{.}06049,$ Net Profit:$$0\mathrm{.}05951$

D$.$ Gross profit: $$0\mathrm{.}0600,$ Net Profit:$$0\mathrm{.}05951$

E$.$ Gross Profit: $$0\mathrm{.}06049,$ Net Profit: $$0\mathrm{.}0597$

$35.$ Calculate John$$s gross profit and net profit if after $3$ months, the spot rate is $$0\mathrm{.}8250/$C$

A$.$ Gross profit: $$0\mathrm{.}12549,$ Net Profit: $$0\mathrm{.}1250$

B$.$ Gross profit: $-$$$0\mathrm{.}1250,$ Net Profit: $-$$$0\mathrm{.}1247$

C$.$ Gross profit: $$0\mathrm{.}1250,$ Net Profit: $$0\mathrm{.}12451$

D$.$ Gross profit: $$0\mathrm{.}1250,$ Net Profit: $$0\mathrm{.}1247$

E$.$ Gross profit: $$0\mathrm{.}1251,$ Net Profit: $$0\mathrm{.}12451$

$36.$ A U$.$S$.$ firm sells merchandise today to a German company for $120,000.$ The current exchange rate is $$1\mathrm{.}23/,$ the account is payable in six months, and the firm chooses to avoid any hedging techniques designed to reduce or eliminate the risk of changes in the exchange rate. The U$.$S$.$ firm is at risk today of a loss if:

A$.$ the exchange rate changes to $$1\mathrm{.}21/.$

B$.$ the exchange rate changes to $$1\mathrm{.}26/.$

C$.$ the exchange rate doesn't change.

D$.$ The firm will not lose money

E$.$ C and D