please answer all problems Exercises:

Chapter $8$

Problem $8\mathrm{.}1$ Peregrine Funds $-$ Jakarta Samuel Samosir trades currencies for

Peregrine Funds in Jakarta. He focuses nearly all of his time and attention on the U$.$S$.$

dollar$/$Singapore dollar $($$$/$$$$)$ cross$-$rate. The current spot rate is $$\frac{0\mathrm{.}6000}{S}$$$.$ After

considerable study, he has concluded that the Singapore dollar will appreciate versus the

U$.$S$.$ dollar in the coming $90$ days, probably to about $$\frac{0\mathrm{.}7000}{?}$ S $$.$ He has the following

options on the Singapore dollar to choose from:

a$)$ Should Samuel buy a put on Singapore dollars or a call on Singapore dollars?

b$)$ What is Samuel's breakeven price on the option purchased in part a$)?$

c$)$ What is Samuel's gross profit and net profit $($including premium$)$ if the ending

spot rate is $$\frac{0\mathrm{.}70}{S}$$ $?$

d$)$ What is Samuel's gross profit and net profit $($including premium$)$ if the ending

spot rate is $$\frac{0\mathrm{.}80}{S}$$ $?$

Problem $8\mathrm{.}2$ Paulo's Puts. Paulo writes a put option on Japanese yen with a strike price

of $)$ at a premium of $0\mathrm{.}0080!in$ per yen and with an expiration date

six month from now. The option is for $12,500,000.$ What is Paulo's profit or loss at

maturity if the ending spot rates are $\frac{110}{\text{\$}},\frac{115}{\text{\$}},\frac{120}{\text{\$}},\frac{125}{\text{\$}},\frac{130}{\text{\$}},\frac{135}{\text{\$}},$ and

$\frac{140}{?}$ $

Problem $8\mathrm{.}3$ Amber McClain, Amber McClain, the currency speculator we met earlier

in the chapter,sells eight June futures contracts for $500,000$ pesos at the closing price

quoted in Exhibit $8\mathrm{.}1$

a$.$ What is the value of her position at maturity if the ending spotrate is $$\frac{0\mathrm{.}12000}{P}s?$

b$.$ What is the value of her position at maturity if the ending spotrate is $$\frac{0\mathrm{.}09800}{P}s?$

c$.$ What is the value of her position at maturity if the ending spotrate is $$\frac{0\mathrm{.}11000}{P}s?$

Problem $8\mathrm{.}4$ Black River Investments. Jennifer Magnussen, a currency trader for

Chicago$-$based Black River Investments, uses the following futures quotes on the British

pound to speculate on the value of the British pound.Exercises:

Chapter $8$

a$.$ If Jennifer buys $5$ June pound futures, and the spot rate at maturity is

$$1\mathrm{.}3980/$pound$,$ what is the value of her position?

b$.$ If Jennifer sells $12$ March pound futures, and the spot rate at maturity is

$$\frac{1\mathrm{.}4560}{?}$ pound, what is the value of her position?

c$.$ If Jennifer buys $3$ March pound futures, and the spot rate at maturity is

$$\frac{1\mathrm{.}4560}{?}$ pound, what is the value of her position?

d$.$ If Jennifer sells $12$ June pound futures, and the spot rate at maturity is

$$\frac{1\mathrm{.}3980}{?}$ pound, what is the value of her position?: