Question: Part 2. Problem (8 pts) Given the following information for a currency straddle: 1 The current spot rate of the Singapore dollar is $.50 The

Part 2. Problem (8 pts) Given the following information for a

Part 2. Problem (8 pts) Given the following information for a currency straddle: 1 The current spot rate of the Singapore dollar is $.50 The call option premium on the Singapore dollar is (S$) = 5.015 The put option premium on Singapore dollar (S$) = .009 Call and put option strike price = $.55 One option contract represents S$70,000. What are the break-even points of the straddle. a. b. For the buyer of a straddle, calculate the profit/loss if the current spot price is $.60 For the writer of the straddle, calculate the profit/loss if the current spot C. price is $.60. Why do investors purchase currency straddles? d

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