Speculating with currency put options

Assignment Help Finance Basics
Reference no: EM131173340

(Speculating with currency Put options) Alice Duever purchased a put option on British pounds for $0.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a Britissh pound option. What was Alice's net profit on the option?  

Reference no: EM131173340

Questions Cloud

Monopolistic competition and monopoly : Risk-averse persons sometimes prefer to play some gambles even if they know that those gambles are not fair, i.e., on average people lose by playing them.  Which of the following is true for perfect competition but not true for monopolistic competiti..
Pay for the company stock : Micro, Inc. will pay a dividend of $2.30 per share next year. Ifthe company plans to increase its dividend by 9 percent per year indefinitely, and you require a 12percent return on your investment, what should you pay for the company's stock?
In what way will the target behavior be assessed : In what way will the target behavior be assessed? Provide details on a method to document the targeted behaviors. Test the assessment out in your practicum placement.
Higher risk-adjusted returns : Determine which stock has higher risk-adjusted returns according to the Sharpe Index. Which stock has the higher risk-adjusted returns according to the Treynor Index?
Speculating with currency put options : Alice Duever purchased a put option on British pounds for $0.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a Britissh pound option. What was Alice's..
Explain what are at least five key points in the articles : What are at least five key points in the articles and the text readings? Based upon your experience in education, how might you apply this content to a classroom and instruction?
What is the bonds valuation : Bond 1 has a coupon rate of 0.0400, a face value of $10,000, for 20 years, pays dividends on a semi-annual basis, and a required yield (YTM) of 0.0350. What is the bonds valuation?
When can transition planning begin for students with needs : When can transition planning begin for students with special needs? How do transition services for students with learning disabilities differ from those with intellectual or severe disabilities?
Prepare presentation detail history of learning disabilities : Prepare a PowerPoint presentation detailing the history of learning disabilities. Provide substantial definitions and discuss discrepancies that may cause misidentification of students.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Find the price of a call option on the stock

The current price of a stock is $21. In 1 year, the price will be either $26 or $14. The annual risk-free rate is 3%. Find the price of a call option on the stock that has a strike price is of $25 and that expires in 1 year.

  Calculate the total interest cost over 180 days

Using the forecast prime rate changes, answer the following questions. a. Calculate the total interest cost over 180 days for a fixed-rate loan. b. Calculate the total interest cost over 180 days for a variable-rate loan.

  Estimate of the current stock price

There are 7.1 million shares of stock outstanding and investors require a return of 13 percent on the company's stock. The corporate tax rate is 39 percent. a. What is your estimate of the current stock price?

  Bankruptcy of the considerable number of accomplices

The firm was broken down because of bankruptcy of the considerable number of accomplices. Stock was sold for Rs. 1,09,000 while furniture brought Rs. 40,000. Rs. 41,000 were gotten from Debtors.

  Construct an example of the cycle of money

Construct an example of the cycle of money, identify all the players involved, and identify their individual benefits from participating in the cycle of money.

  Calculate pv of future salary-fv of savings

Mike Polanski is 30 years of age and his salary next year will be $40,000. If the discount rate is 8 percent, what is the PV of these future salary payments?

  Columnar money book of mitra

On first May, 2011 the columnar money book of Mitra demonstrated that he had ` 2,000 in his money box and that there was a bank overdraft of ` 8,000. Amid the day the accompanying exchanges occurred

  Assignment-project motorcycles

You are a project manager for a medium-sized manufacturer of motorcycle cruisers. The engines in motorcycle cruisers, like the ones you manufacture, are usually categorized by size rather than the number of cylinders.

  Financial analysts expect a stock to sell for 50 one year

financial analysts expect a stock to sell for 50 one year from now and pay 4 dividend during the next year. what market

  Find out the return on equity

Question 1: The Jamestown Group has equity of $421,000, sales of $792,000, and a profit margin of 6 percent. What is the return on equity?

  What is the amount of the first interest payment

Amount issued $420 million Offered Issued at a price of 102.00% plus accrued interest (proceeds to company 101.790%) through First Boston Corporation.

  Current equity valuations in order to recommend strategic

Throughout this course, you will prepare a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) that will demonstrate your understanding of key financial concepts, strategies, and practices.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd