Assume that the Japanese yen is trading at a spot price of 92.04 cents per 100 yen. Further assume that the premium of an American call (put) option with a striking price of 93 is 2.10 (2.20) cents. Calculate the intrinsic value and the time value of the call and put options. (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Enter your answers in cents per 100 yen. Round your answers to 2 decimal places.)

Assume that the Japanese yen is trading at a spot price of 92.04 cents per 100 yen. Further assume that the premium of an American call (put) option with a striking price of 93 is 2.10 (2.20) cents. Calculate the intrinsic value and the time value of the call and put options. (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Enter your answers in cents per 100 yen. Round your answers to 2 decimal places.)

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 27QA

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Assume that the Japanese yen is trading at a spot price of 92.04 cents per 100 yen. Further assume that the premium of an American call (put) option with a strike price of 93 is 2.10 (2.20) cents. Calculate the intrinsic value and the time value of the call and put options.
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You have entered in a put option contract on British pound at a price of $0.04 per British pound. When the option was exercised the dollar was selling of 0.63 British pound. Compute your net profit from the option if the exercise price was $1.80 and size of option is 50,000. a. $8,634. b. Pound 8,634. c. $56,5 d. Pound 56,5 00009292d 56,500
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