Suppose you expect that Singapore dollar will appreciate versus the US$ in the coming 60 days. The

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Suppose you expect that Singapore dollar will appreciate versus the US$ in the coming 60 days. The current spot rate is $0.70/S$. You expect an appreciation to $0.90/S$. The following options are available to you:

Option	Strike Price	Premium
Put on S$	$0.78/S$	$0.012/S$
Call on S$	$0.78/S$	$0.038/S$

What option would you buy?

What is the gross and net profit (i.e. accounting for the premium) if the spot rate at the end of 60 days is $1.24/S$?

What is the gross and net profit (i.e. accounting for the premium) if the spot rate at the end of 60 days is $1.45/S$?

Related Book For answer-question

Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

See More Books

Posted Date: Oct 31, 2022 07:18 AM

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Suppose you expect that Singapore dollar will appreciate versus the US$ in the coming 60 days. The

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Economics

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