15. You paid S0.1 for a one-year Bunepeas all optiom fer t1 with the strke pise

Question

15. You paid S0.1 for a one-year Bunepeas all optiom fer t1 with the strke pise of S1.7.Awhsh eacha maturity date will you excrcise your option A-Less than $1.7 B. Less than $1.8/ C, More than $1.7 D, More than $1.8 16. Which of the following are pessiltble swaps? A. Floating-for-Doating B. Zero-coupon for floating C. Fixed for floating D. All of these Yesterday, you entered into a futures ceetract to buy 662,500 at S1.50 per 51.46. How much have you madelout &Suppose; the futures price clones today A. Depends on your margin balance. B. You have made $2,500.00 C. You have lost $2,500.00. D. You have neither made nor lost money, yet. 18. Comparing "forward" and "futures" exchange contracts, we can say thot A they are both "marked-to-market" daily B. their major difference is in the way the underlying asat is priced e future purchise or daily and forwards semle at maturity C. a futures contract is negotiated by open outcry betwoen floor brokers or traders and is traded on erpanined exchanges, while forward contract is tailor-made by an international bank for its clients and is tnaded OTC D. both b and c 19. In which market does a clearinghouse serve as a third party to al transactions? A. Futures B. Forwards C.Swaps D. None of the above 20. The current spot exchange rate is $1.5s -1.00 and the three-month forward rate is $1.60-1.00. Consider a three month American call option on 62,500. For this option to be considered at-dhe-money, the strike price A. $1.60-1.00 B. $1.55-1.00 C, S 1.55 (1 +ra a €1.00 (1 +Oya D. none of the above

Explanation / Answer

15) Call option is profitable above strike price. Option premium is ignored as it is a sunk cost
Hence option c is correct

16)All the given options are possible types of swaps
Hence d is correct

17) Since the price has decreased one has lost = (1.50-1.46)*62500=$2500
Hence option C is correct

18)B and c option are true for the contracts
hence d option is correct


19) a is correct option

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