Question: Essay (Total Point: 4.00) #3 Jack Fa is a foreign currency trader at Mebeng, Kuala Lumpur. Recently, he speculates to gain profit from his

Essay (Total Point: 4.00) #3 Jack Fa is a foreign currency trader at Mebeng, Kuala Lumpur. Recently, he speculates to gain profit from his expectation on future foreign currency. Below is the information on option market in Singapore dollar. OPTION Strike price PUT 0.3300 CALL 0.3200 i. If Jack Fa expects foreign currency will be rise in a month, calculate Jack's profit. 1-month spot 0.3400 0.3500 ii. If the foreign currency is expected to drop by 0.5 percent from the exercise price at the end of 3-month spot, calculate Jack's profit. Premium 0.0005 0.0005 (2 marks) (2 marks)

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