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Today, we have the following price (that is, premium) quotations for the U.S. dollar options (C$ cents per U.S. dollar, size = U$100,000 per contract). Option & Underlying 102.04 102.04 102.04 102.04 Strike Price 98 100 102 105 Calls - Last April June 2.02 3.36 0.89 2.34 0.36 1.6 0.15 1.03 September 4.40 3.40 2.65 1.85 Puts - Last April June September 0.39 1.51 2.35 1.26 2.50 3.35 2.74 3.80 4.65 5.51 6.18 6.90 Required: (1) You speculate that, in June, the Canadian dollar will rise sharply vs the U.S. dollar. What should you do to act on your speculation, that is, should you buy a put or a call on U.S. dollar? (2) For a strike price of C$98cents per US$, what is your June option break-even price (C$ per US$)? (3) Calculate your gross profit (or loss) and net profit (or loss) per contract if the spot rate at the end of June is indeed C$0.95/U$. (4) Recalculate your gross profit (or loss) and net profit (or loss) per contract if the spot rate at the end of June is C$1.00/U$. (5) (Bonus) If you can, please draw a diagram to illustrate your answers. Today, we have the following price (that is, premium) quotations for the U.S. dollar options (C$ cents per U.S. dollar, size = U$100,000 per contract). Option & Underlying 102.04 102.04 102.04 102.04 Strike Price 98 100 102 105 Calls - Last April June 2.02 3.36 0.89 2.34 0.36 1.6 0.15 1.03 September 4.40 3.40 2.65 1.85 Puts - Last April June September 0.39 1.51 2.35 1.26 2.50 3.35 2.74 3.80 4.65 5.51 6.18 6.90 Required: (1) You speculate that, in June, the Canadian dollar will rise sharply vs the U.S. dollar. What should you do to act on your speculation, that is, should you buy a put or a call on U.S. dollar? (2) For a strike price of C$98cents per US$, what is your June option break-even price (C$ per US$)? (3) Calculate your gross profit (or loss) and net profit (or loss) per contract if the spot rate at the end of June is indeed C$0.95/U$. (4) Recalculate your gross profit (or loss) and net profit (or loss) per contract if the spot rate at the end of June is C$1.00/U$. (5) (Bonus) If you can, please draw a diagram to illustrate your answers

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