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5. You buy a put option on Swiss Francs (SFr) for a premium of $0.01 per...

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Finance

5. You buy a put option on Swiss Francs (SFr) for a premium of$0.01 per SFr, with an exercise price of $0.95. If at the maturitydate, the spot rate is $0.91, (a) What is your net profit (or loss)per unit of SFr at the maturity date? (b). Draw a net profit graphfor buying this put option. (c). Draw a net profit graph forselling this put option.

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Transcribed Image Text

5. You buy a put option on Swiss Francs (SFr) for a premium of$0.01 per SFr, with an exercise price of $0.95. If at the maturitydate, the spot rate is $0.91, (a) What is your net profit (or loss)per unit of SFr at the maturity date? (b). Draw a net profit graphfor buying this put option. (c). Draw a net profit graph forselling this put option.

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