If call options on USD with a strike price of AUD1.2604/USD have a premium of AUD0.0283, what is the break-even price for a buyer or a seller of these options? Assume that there are no brokerage fees. Ⓒa. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2887 b. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2321 c. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2887 d. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2321 e. The buyer's BEP is AUD 1.2604 and the seller's BEP is AUD 1.2887

If call options on USD with a strike price of AUD1.2604/USD have a premium of AUD0.0283, what is the break-even price for a buyer or a seller of these options? Assume that there are no brokerage fees. Ⓒa. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2887 b. The buyer's BEP is AUD 1.2321 and the seller's BEP is AUD 1.2321 c. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2887 d. The buyer's BEP is AUD 1.2887 and the seller's BEP is AUD 1.2321 e. The buyer's BEP is AUD 1.2604 and the seller's BEP is AUD 1.2887

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 1BIC

See similar textbooks

Similar questions

If put options on USD with a strike price of AUD6.9/USD have a premium of AUD4.3, what is the break- even price (BEP) for a buyer or a seller of these options? Assume that there are no brokerage fees. Question Answer a. The buyer's BEP is AUD 2.6000 and the seller's BEP is AUD 11.2000 b. The buyer's BEP is AUD 2.6000 and the seller's BEP is AUD 2.6000 c. The buyer's BEP is AUD 11.2000 and the seller's BEP is AUD 11.2000 d. The buyer's BEP is AUD 11.2000 and the seller's BEP is AUD 2.6000 e. The buyer's BEP is AUD 6.9000 and the seller's BEP is AUD 11.2000
A trader creates a SHORT STRADDLE for GBP/USD with a strike price of 1.3865. The call option premium on GBP is 0.019 USD. The put option premium is 0.024 USD. One option contract represents GBP 125,000. What is the net profit of the trader if GBP/USD = 1.3869 at expiry?
A trader creates a LONG STRADDLE for GBP/USD with a strike price of 1.2457. The call option premium on GBP is 0.017 USD. The put option premium is 0.022 USD. One option contract represents GBP 125,000. What is the net profit of the trader if GBP/USD = 1.2427 at expiry?
Suppose a put option has X=103 and Premium=8. As a seller of the put, what is the minimum profit/loss?
A call option has a strike price of MYR3.00/SGD. If the option is exercised before maturity, what price in the followings would maximize gain? a. MYR3.00/SGD. b. MYR2.90/SGD. c. MYR3.05/SGD. d. MYR2.95/SGD.
A put option has a strike price of MYR3.00/SGD. If the option is exercised before maturity, what price in the followings would maximize gain? a. MYR3.00/SGD. b. MYR2.90/SGD. c. MYR3.05/SGD. d. MYR2.95/SGD.
You write a call option with a strike of $1.473/£ and a premium of $0.72. The current spot exchange rate is $1.434/£. What is the option's intrinsic value?
A put option is available for Swiss franc with an exercise price of AUD0.7754 and a premium of AUD0.0440. Assume that there are no brokerage fees. The future spot rate at which the _____________ of the option breaks even is AUD____________ . a. both buyer and seller; AUD 0.7314 b. seller; AUD 0.7314 c. buyer; AUD 0.8194 d. both buyer and seller; AUD 0.8194 e. buyer; AUD 0.7314
A trader buys a call option with a strike price of $45 and a put option with a strike price of $40. Both options have the same maturity. The call costs $3 and the put costs $4. Draw a diagram showing the variation of the trader’s profit with the asset price. Please do not copy/paste other responses that are provided elsewhere.
Consider a call option selling for Ksh.14 in which the exercise price is Ksh.162 and the price of the underlying is Ksh.164. Determine the value at expiration and the profit for a buyer under the following outcomes: The price of the underlying at expiration is Ksh.164. The price of the underlying at expiration is Ksh.158.
The premium on a call option is primarily a function of the difference in spot price S relative to the strike price X, the length of time until expiration T, and the volatility of the currency o. C = f(S-X, T, o) For each characteristic of a call option, use the table to indicate whether that would lead to a higher call option premium or a low call option premium (all else equal). Characteristic A lower spot price relative to the strike price A shorter time before expiration A higher level of volatility for the currency Higher Call Option Premium O Lower Call Option Premium When using a call option to hedge payables in an international currency, a U.S. based MNC can lock in the to obtain the needed foreign currency. maximum minimum amount of dollars needed
From the perspective of the writer (seller) of a put option written on£31.250. If the strike price is $1.60/f, and the option premium is$1,250, at what exchange rate do you break even?O $1.64/£O $1.54/£O $1.60/€O $1.56/