MCQ: International Financial Management: 1. Currency options provide the right but NOT the obligation to purchase or sell currencies at specified (strike) prices. (a)True (b) False
MCQ: International
1. Currency options provide the right but NOT the obligation to purchase or sell currencies at specified (strike) prices.
(a)True (b) False
2. A put option on Canadian dollars with a strike price of $.60 is purchased by a speculator for a premium of $.03 per unit. If the Canadian dollar’s spot rate is $.55 at the time the options is exercised, what is the net profit per unit to the speculator?
(a) $0.20
(b) $0.00
(c) $0.03
(d) $0.05
3. A call option on Canadian dollars with a Strike price of $.60 is purchased by a speculator for a premium of $.05 per unit. If the Canadian dollar’s spot rate is $.65 at the time the options is exercised, what is the net profit per unit to the speculator?
(a) $0.03
(b) $0.05
(c) $0.02
(d) $0.00
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