Foreign Exchange Assignment | Homework For You
May 26th, 2020
A foreign currency ___________ is a contract giving the purchaser (the buyer) the right, but not the obligation, to buy or sell a given amount of foreign exchange at a fixed price per unit for a specified time period (until the maturity date). The________________________, is the cost of the option
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premium or option price; option | ||
option ; premium or option price | ||
forward; premium or option price; | ||
premium or option price; forward |
- Jasper Pernik is a currency speculator who enjoys “betting” on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper buys $100,000 worth of yen at today’s spot price her potential gain is ________ and her potential loss is ________.
A) $100,000; unlimited B) unlimited; unlimited C) $100,000; $100,000 D) unlimited; $100,000 Get Finance homework help today