Question: Please answer both thank you. Will be sure to leave a thumbs up! 30-Sep SPOT $ 1.1575 / Euro U.S. Cents/Euro U.S. Cents / Euro
30-Sep SPOT $ 1.1575 / Euro U.S. Cents/Euro U.S. Cents / Euro CALL Option Premium PUT Option Premium November March November March 3.85 0.65 0.90 0.50 EXERCISE PRICE 1.1300 1.1350 1.1400 1.1450 1.1500 1.1550 1.1600 1.1650 1.1700 1.1750 1.1800 3.10 1.85 1.50 2.40 1.17 0.90 1.80 0.67 0.50 1 35 0.35 0.95 U.S. Cents / Euro A 0.65 1.25 0.85 105 1.65 135 1.65 2.15 2.00 2.75 AU.S. Cents/ Euro A EXERCISE PRICE 1.1300 1.1350 11400 1.1450 11500 1.1550 11600 1.1650 1.1700 1.1750 1.1800 10-A-B. 11.5 pts Your U.S. firm needs 1 million Euros in mid November to send to pay a European supplier. The current spot price is $1.1575 / Euro. At Spot, the value now of 1 mil. Euros is $1,157,500. Your manager is worried that the S may weaken and the cost to buy the Euros in November could be much higher. You are told to arrange an appropriate options hedge so that the maximum all in net cost' (includes option premium) is not more than $1,168,000. Use the appropriate data above, list ONE option that meets the $1,168,000 maximum all-in net purchase cost (option hedge cost included) in mid-Nov. RECORD W10-A-B ANSWER Circle Option Option's Opt. Premium Total cost of Total all-in net cost of 1 mill. Type month Strike Price Per Euro Options on 1 mill Euro (including option cost) Euro eto exercised CALL OR 10-A 10-B PUT 11-A-B. 11.5 pts Your U.S. firm will receive 1 million Euros in mid-March from a European supplier's payment. The current spot price is $1.1575 / Euro. At Spot, the value now of 1 mil. Euros is $1,157,500. Your manager is worried that the Euro may weaken and the value after selling the Euros in March could be much lower. You are told to arrange an appropriate options hedge so that the minimum "all in net value (includes option premium) is not less than $1,146,000. Use the appropriate data above, list ONE option that meets the $1,146,000 minimum all-in net purchase cost (option hedge cost included) in mid-March. ANSWER WII-A-B Circle Option Option's Opt. Premium Total cost of Total all-in net value rec'd on Type month Strike Price Per Euro Options on 1 mill 1 mill. Euro (including option Euro eto cost) of exercised CALL OR 11-A 11-B PUT
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