Calandra Panagakos at CIBC. Calandra Panagakos works for CIBC Currency Funds in Toronto. Calandra is something of a contrarian-as opposed to most of the forecasts, she believes the Canadian dollar (C$) will appreciate versus the U.S. dollar over the coming90 days. The current spot rate is $0.6751/C$. Calandra may choose between the following options on the Canadian dollar:a. Should Calandra buy a put on Canadian dollars or a call on Canadian dollars?b. What is Calandra's breakeven price on the option purchased in part a?c. Using your answer from part a, what is Calandra's gross profit and net profit (including premium) if the spot rate at the end of 90 days is indeed 50.7604/CS?d. Using your answer from part a, what is Calandra's gross profit and net profit (including premium) if the spot rate at the end of 90 days is $0.8252/CS?a. Should Calandra buy a put on Canadian dollars or a call on Canadian dollars? (Select the best choice below.)O A. Since Calandra expects the Canadian dollar to appreciate versus the US dollar, she should buy a put on Canadian dollars.O B. Since Calandra expects the Canadian dollar to depreciate versus the US dollar, she should buy a put on Canadian dollars.O C. Since Calandra expects the Canadian dollar to depreciate versus the US dollar, she should buy a call on Canadian dollars.✔D. Since Calandra expects the Canadian dollar to appreciate versus the US dollar, she should buy a call on Canadian dollars.b. What is Calandra's breakeven price on the option purchased in part a?Calandra's breakeven price on the option is $CS. (Round to five decimal places.) Data table(Click on the icon to import the table into a spreadsheet.)OptionStrike PricePut on C$$0.7003Call on C$$0.7003PrintPremium$0.00004/C$$0.00047/C$Done·X

A call option gives the right but not the obligation to buy at the strike price. We can determine…

Answered: b. What is Calandra's breakeven price…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. 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 $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from: Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.35 $0.047 Put on S$ $1.359 $0.006 Samuel decides to sell one put option in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.311/S$ in 90 days? Keep all decimal places. Please type in the number without the currency signs. For example, if your answer is $1.25/S$, then type in 1.25 as your final answer.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. 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 $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from: Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.36 $0.077 Put on S$ $1.37 $0.006 Samuel decides to buy call options in Singapore dollars. What is Samuel's Break-Even spot rate at maturity? Keep the sign and all three decimal places.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S.dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. 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 $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.371 $0.047 Put on S$ $1.37 $0.006 Samuel decides to buy call options in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.286/S$ in 90 days? Keep all decimal places.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. 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 $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from: Option choices on the Singapore dollar: Strike price (US$/Singapore dollar) Premium (US$/Singapore dollar) Call on S$ $1.35 $0.047 Put on S$ $1.343 $0.006 Samuel decides to sell put options on Singapore dollars. What will be Samuel's break-even spot rate (in direct format)? Keep all decimal places.
Samuel Samosir works for Peregrine Investments in Jakarta, Indonesia. He focuses his time and attention on the U.S. dollar/Singapore dollar ($/S$) cross-rate. The current spot rate is $1.39/S$. 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 $1.44/S$. He is considering trading options to profit and has the following options on the Singapore dollar to choose from Option choices on the Singapore dollar: Call on S$ Put on S$ Strike price (US$/Singapore dollar) $1.300 $1.37 Premium (US$/Singapore dollar) $0.047 $0.006 Samuel decides to buy call options in Singapore dollars. What will be Samuel's profit/loss if the ending spot rate is $1.377/S$ in 90 days? Keep all decimal places.

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