Question: a. (50 Points) A Seagull option is a contract defined as follows: - If at maturity, spot X3, client buy USD at spot- (X3X2) -

a. (50 Points) A Seagull option is a contract defined as follows: - If at maturity, spot X3, client buy USD at spot- (X3X2) - Show the payoff diagram of this contract - Decompose this option in to a combination of standard Put/Call European option - Define the target user of this option (exporter or importer) and his/her view of future exchange rate. b. (50 Points) Illustrate and explain two alternative ways to: - Foreign currency borrowing: you want to obtain foreign currency today - Financing future FC debt: you currently hold domestic currency and want to take case of a future foreign liability/debt to be due

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