Question: Answer the question Show all your work in order to receive full credit. All calculations must be carried with four decimal points. Maria Brendt trades

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Show all your work in order to receive full credit. All calculations must be carried with four decimal points. Maria Brendt trades currencies for Keystone Funds in Cape Town. She focuses on the U.S. dollar/South African rand ($/ZAR) FX rate. The current spot rate is $010620/ZAR, and she expects the South African rand to depreciate versus the U.S. dollar in the coming 90 days to about $0.0585/ZAR. She has the following options on the South African rand to choose from. Option Strike Price Premium Put on ZAR $0.0595/ZAR $0.00045/ZAR Call on ZAR $0.0595/ZAR $0.00030/ZAR a. Should Maria buy a put or a call on the South African rand? b. What is Maria's break-event price on the option purchased in part a)? c. Using your answer from part a) what is Maria's payoff and profit if the spot rate at the end of the 90 days is $0.0585/ZAR? d. Using your answer from part a) what is Maria's payoff and profit if the spot rate at the end of the 90 days is $0.0625/ZAR

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