University of georgia. finane 4810,the option speculator mini-case is

  university of Georgia, finance 4810

The Option Speculator Mini-Case is designed to test your knowledge of speculation with currency options. 

A speculator is considering the purchase of five three-month Japanese yen call options with a strike price of 96 cents per 100 yen. The premium is 1.35 cents per 100 yen. The spot price is 95.28 cents per 100 yen and the 90-day forward rate is 95.71 cents. The speculator believes the yen will appreciate to $1.00 per 100 yen over the next three months. As the speculator’s assistant, you have been asked to prepare the following:

  1. In Excel , diagram the call option, profit (or loss) on      the y-axis and future spot price on the x-axis.
  2. Determine the speculator’s profit if the yen      appreciates to $1.00/100 yen.
  3. Determine the speculator’s profit if the yen      appreciates only to the forward rate.
  4. Determine the future spot price at which the speculator      will only break even.

Hint: To correctly graph all points on the payoff line, for the chart type in Excel you will need to use an X Y (Scatter) with Straight Lines and Markers.
Keep in mind that for your assignment, you should enter data for Profit and Future Spot Rate as the Y-axis and X-axis variables. To create the data, you will select the Future Spot Rates notes in the questions and you can also add additional Future Spot Rates at regular intervals, and then enter the corresponding Profit in the same row. Also, you need to make sure to include the strike price as one of the future spot rates. On a given row Profit corresponds to the Future Spot Rate.

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more