Show all your work. I can only give you partial credit if you show how you approached the problem! For the time value of money computations show what information you used to calculate the answer. Do not just write down the final answer.

IB431 International Finance 4. Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. Her latest speculative position is to profit from her expectation that the U.S. dollar will rise significantly against the Japanese yen. The current spot rate is 95.00/$. She must choose between the following 90-day options on the Japanese yen: Option Put on yen Call on yen Strike Price 102/$ 102/$ Premium $0.00006/S$ $0.00045/S$ a. Should Cachita buy a put on yen or a call on yen? b. What is Cachita's breakeven price on the option purchased in part (a)? c. Using your answer from part (a), what is Cachita's gross profit and net profit (including premium) if the spot rate at the end of 90 days is 98/$