Please answer the next question based on the following quotes on currency options contracts for Swiss francs (CHF), where each contract has 62,500 CHFs. Exercise prices, call and put premiums are in cents. Calls Vol. Last MC-European 2.78 Puts Vol. L Styl C 31 14 3.60 2.68 000 ៖ NAN 1:21 13 3.1 If you buy one December CALL options contract with an exercise price of $0.79. If at the time of the option expiration date, the spot price for Swiss francs is $0.805, then this call option is and you incur a net O out-of-the-money; loss of $1,275.00 O out-of-the-money; loss of $937.50 O in-the-money; loss of $337.50 O in-the-money; profit of $937.50

Please answer the next question based on the following quotes on currency options contracts for Swiss francs (CHF), where each contract has 62,500 CHFs. Exercise prices, call and put premiums are in cents. Calls Vol. Last MC-European 2.78 Puts Vol. L Styl C 31 14 3.60 2.68 000 ៖ NAN 1:21 13 3.1 If you buy one December CALL options contract with an exercise price of $0.79. If at the time of the option expiration date, the spot price for Swiss francs is $0.805, then this call option is and you incur a net O out-of-the-money; loss of $1,275.00 O out-of-the-money; loss of $937.50 O in-the-money; loss of $337.50 O in-the-money; profit of $937.50

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have called your Forex dealer and asked for quotations USD/EUR on the spot, 1 month, 3-month and 6-month forward rates. The trader has responded with the following: USD 1.284/98 3/5 8/7 13/10 What does this mean in terms of dollars per euro? If you wished to buy spot euros, how much would you pay in dollars? If you wanted to purchase spot USD, how much would you have to pay in euro?
Please answer the next question based on the following quotes on currency options contracts for Swiss francs (CHF), where each contract has 62.500 CHFs. Exercise prices, call and put premiums are in cents. Calls Vol. Last 62,500 Swiss Francs-European 10 2.78 77 Oct 31 3.60 14 2.66 1.59 2.04 $ 1.00 1.39 77 Dec 78 Nov O $40 O $400 O $250 O $25 78 79 79 Dec Oct Nov 82 83 83 10 645 10 47 6 Puts Vol. Last Style. 0.59 0.99 0.33 47 100 50 79 Dec 80 Nov 80 Dec 81 Oct 81 Nov 81 Dec Nov Nov 0.20 Dec 0.40 The cost of buying one CHF call options contract with an exercise price of $0.83 which expires on the 3rd Wednesday of December is: 10 10 118211153 15 0.23 0.43 0.27 3.12
Please answer the next question based on the following quotes on currency options contracts for Swiss francs (CHF), where each contract has 62,500 CHFs. Exercise prices, call and put premiums are in cents. Calls Vol. Last Puts Vol. Last 62,500 Swiss Francs-European Style. 77 Oct 10 2.78 77 Dec 31 3.60 78 Nov 47 0.23 78 Dec 14 2.66 100 0.43 79 Oct 50 0.27 79 Nov 5 1.59 79 Dec 5 2.04 80 Nov 5 1.00 80 Dec 21 1.39 81 Oct 1.41 81 Nov 0.59 10 1.55 81 Dec 6 645 0.99 82 Nov 10 0.33 83 Nov 47 0.20 is 3.12 83 Dec 6 0.40 You buy one November PUT options contract with an exercise price of $0.81. If at the time of the option expiration date, the spot price for Swiss francs is $0.815, then this Put option is _, and you incur a net in-the-money; profit of $312.50 O out-of-the-money; loss of $312.50
You trade in two types of options. First, you purchase 7 call option contracts on the Euro with an exercise price of 1.25. Second, you sell 8 put option contracts on the Euro with an exercise price of 1.22. The fees/prices on the contracts are $.04 (calls) and $.03 (puts). Forward Rates for the Euro are 1.210-11 $/E. If contract sizes for Euros are 125,000 options per contract and the final price of Euros is 1.40. $/E, how much profit/loss have you made from participation in options?
One has the following data regarding spot and 1 year forward for USDCHF Spot 1.2500 F 1.2000 # of CHF to buy 1 USD US interest rate 5.00% Swiss interest rate 3.14% All quotes above are "market"quotes, i.e. one can buy or sell USD, borrow or lend, at the stated rates. A practioner would say that the quote for F seems "out of line", thus there could be an arbitrage opportunity. What would be profit in USD from arbitrage on a notional amount of 100,000,000 USD? 2,031,250 2,437,500 2,949,375 1,950,000
As a dealer in currency, you buy put option on euros. The written strike price on the option of $1.2000/€ at a premium of 1.75¢ per euro ($0.0175/€). The expiration date six months from now. The option is for €150,000. Calculate profit or loss should you exercise before maturity at a time when the euro is traded spot at the following: (a). $1.15/€ (b). $1.20/€ (c). $1.30/€ (d). $1.40/€
Please Help The Swiss Franc is trading at 1.1464 $/ SFr, the euro is trading at 1.0828 $/euro. If you can buy or sell SFr/euro at 0.9451, is there an arbitrage? If so, how much can you make with one round - trip using $1,000,000 ? Please Help
You are to receive €360,000 on May 16. Today’s spot rate is $1.10/€. The forward rate is $1.12/€. On May 16 the spot rate is $1.11/€. Futures contracts are for €125,000 each. On May 16 you, 1) close out the forward contracts, and 2) receive the €360,000 and exchange them for dollars. Q4. How much money did you make or lose on the contracts? Q5. When you combine the gain or loss on the futures contracts with the dollars exchanged for the €360,000 what was the dollar/euro total exchange rate? Q6. Why was the amount you received per euro more than the $1.12 future contract hedge amount?
The EUR/USD quotes 1.1295-1.1305 and you implement a long position for 100,000 €. 2 days later the EUR/USD shows 1.1431-1.1441. What is your P&L? a)1260 $ b)1460 $ c)1260 € d)1460 €
One has the following data regarding spot and 18 month forward for USDCHF Spot 1.2000 # of CHF to buy 1 USD F 1.1200 US interest rate 5.00% Swiss interest rate 3.14% All quotes above are "market"quotes, i.e. one can buy or sell USD, borrow or lend, at the stated rates. A practioner would say that the quote for F seems "out of line", thus there could be an arbitrage opportunity. What would approximatelly be the profit in USD from arbitrage on a notional amount of 100,000,000 USD? 4,139,029 3,863,094 5,609,212 4,635,712
1. The spot market quotes the exchange rate of the GHS to a CADS as GHS 3.562 while the 90-day forward quotes it at GH3.425. Required: Calculate the annualized forward premium or discount. 2. Suppose bid price for £=GHS6.27, ask price = GHS6.316. Required: Calculate the bid/ask spread.
A currency speculator wants to speculate on the future movements of the €. The speculator expects the € to appreciate in the near future and decides to concentrate on the nearby contract. The broker requires a 2% Initial Margin (IM) and the Maintenance Margin (MM) is 75% of IM. Following € Futures quotes are currently available from the Chicago Mercantile Exchange (CME). Euro (CME) - €125,000; $/€ Open High Low Settle Change Open Interest June 1.2216 1.2276 1.2175 1.2259 -0.0018 255,420 Sept 1.2229 1.2288 1.2189 1.2269 - 0.0018 19,335 In addition to the information provided above, consider the following CME quotes that are available at the end of day one’s trading: Euro (CME) - €125,000; $/€ Open High Low Settle Change Open Interest June 1.2216 1.2276 1.2175 1.2176 -0.0083…

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