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# Week 3 Individual Assignment 3.38 out of 11 points (Questions Nos. 1-14 worth .642857 points each, No. 15 worth 2 points) 3.38 after late penalty (if...

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Week 3 Individual Assignment 3.38 out of 11 points (Questions Nos. 1-14 worth .642857 points each, No. 15 worth 2 points) 3.38 after late penalty (if applicable) Correct Student Question Answer Answer Solutions: 1 b 0 0.160714 x €200,000 x \$1.10 = \$220,000 2 b 0 0.160714 x 3 c 0 0.160714 x 4 a 0 0.160714 x 5 b 0 0.160714 x 6 a 0 0.160714 x 7 d 0 0.160714 x 8 d 0 0.160714 x 9 c 0 0.160714 x 10 d 0 0.160714 x 11 b 0 0.160714 x 12 b 0 0.160714 x Amount received per unit = \$.022 - \$.02 = \$.002 x THB10,000,0000 = \$20,000. 13 c 0 0.160714 x 14 d 0 0.160714 x ¥5,000,000 x \$.0095/¥ = \$47,500 15 1.133 Correct Answer: Forward Forward Buy Sell Purchase Purchase Purchase Sale Futures Futures Calls Puts 0.066667 a. x x x b. x x x c. x x x d. x x x e. x Student's Answer: a. b. c. d. e. Grading: 0.000 0.067 0.000 0.067 0.000 0.067 0.067 0.000 0.067 0.000 0.067 0.000 0.067 0.000 0.067 0.000 0.067 0.000 0.000 0.067 0.000 0.067 0.000 0.067 0.067 0.067 0.067 0.067 0.000 0.067 The premium of the option is \$.05 x (31,250 units) = \$1,562.50. Since the option will not be exercised, the net profit is -\$1,562.50. \$.03 = \$375,000. Amount of dollars received minus premium = \$6,500,000. The net profit per unit is: \$.87 - \$.81 - \$.04 = \$.02. The net profit per unit as a percent of the initial investment per unit is: \$.02/\$.04 = 50%. paid for options = C\$100,000 x \$.01 = \$1,000. Amount of dollars received less premium = \$84,000. Forward Contract Futures Contract Options Contract denominated in yen. yen. remitting funds to the U.S. parent. denominated in Canadian dollars. the near future (but the deal may not go through).

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