Find the value of your portfolio

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Reference no: EM131944610

Question: You believe the US dollar will decrease relative to the Australian dollar (A$) and increase relative to the Hong Kong dollar (HK$) over the next 6 months. You decide to create a portfolio consisting of 10 six month Australian dollar put contracts and 10 six month Hong Kong dollar call contracts. The put contracts have 20,000 Australian dollars attached and have a strike price and premium of $1.05 and $.02, respectively. The call contracts have 75,000 Hong Kong dollars attached and have a strike price and premium of $.12 and $.01, respectively.

Find the value of your portfolio (in USD) if the spot rates at expiration are as follows: $1.02/A$, $.09/HK$. Round intermediate steps two four decimals and your final answer to two decimals.

Reference no: EM131944610

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