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Vatic Capital. Cachita Haynes works as a currency speculator for Valic Capital of Los Angeles. Her latest speculative position is to profit from her expectation
Vatic Capital. Cachita Haynes works as a currency speculator for Valic Capital of Los Angeles. Her latest speculative position is to profit from her expectation that the U.S. dollar will rise significantly against the Japanese yen. The current spot rate is 118.00$. She must choose between the following 90-day options on the Japanese yen: 6- a. Should Cachita buy a put on yen or a call on yen? A Data Table b. What is Cachita's breakeven price on the option purchased in part a? c. Using your answer from part a, what is Cachita's gross profit and net profit (including premium) if the spot rate at the end of 90 days is $140.00/$? a. Should Cachita buy a put on yen or a call on yen? (Select the best choice below.) (Click on the icon to import the table into a spreadsheet.) Option Put on yen Call on yen O A. Cachita should buy a put on yen to profit from the fall of the dollar (the rise of the yen). O B. Cachita should buy a call on yen to profit from the fall of the dollar (the rise of the yen). OC. Cachita should buy a call on yen to profit from the rise of the dollar (the fall of the yen). OD. Cachita should a put on yen to profit from the rise of the dollar (the fall of the yen). Strike Price 12618 126/S Premium S0.00003/ S0.00046/ Print Done b. What is Cachita's breakeven price on the option purchased in parta? Cachita's breakeven price on her option choice is $4. (Enter as US dollars and round to five decimal places.) c. Using your answer from part a, what is Cachita's gross profit and net profit (including premium) if the spot rate at the end of 90 days is #140.00/$? Cachita's gross profit, if the ending spot rate is $140.00/$, is $ 4. (Enter as US dollars and round to five decimal places.) Cachita's net profit. If the ending spot rate is x140.00/S, Is $4. (Enter as US dollars and round to five decimal places.)
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