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Question1) For European options, what is the effect of an increase in the strike price...

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Finance

Question1) For European options, what is the effect of an increase in the strike price E?

A) Decrease the value of calls, increase the value of puts ceteris paribus

B) Increase the value of calls, decrease the value of puts ceteris paribus

Question 2) To hedge a foreign currency payable using a money market hedge, you should

A) borrow the foreign currency in the money market, convert it your home currency in the spot

market, and lend the home currency in the money market.

B) borrow your home currency in the money market, convert it to the foreign currency in the

spot market, and lend the foreign currency in the money market.

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