Current spot rate-call option with strike price

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Reference no: EM132016622

Do you think the fact that an acquisition was later divested means that it was a failure? why or why not?

1. Suppose the current spot rate is USD 1 = MXN 20. A call option with a strike price of $0.0525 is __________ and a call option with a strike price of $0.0475 is ___________.

A) in the money, in the money

B) out of the money, out of the money

C) out of the money, in the money

D) in the money, out of the money

E) need to know the option premiums to answer the question

2. Three days ago, you entered into a futures contract to buy €62,500 at $1.50 per €. Over the past three days the contract has settled at $1.50, $1.54, and $1.52. How much have you made or lost?

A) Lost $0.04 per € or $2,500

B) Lost $0.06 per € or $3,750

C) Made $0.04 per € or $2,500

D) Made $0.02 per € or $1,250

E) None of the above

Reference no: EM132016622

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