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Answer:
If the Japanese yen appreciates against the U.S. dollar,
a. Japanese businesses gain by a decrease in the dollar price of exports to the United States.
b. Japanese consumers gain by a decrease in the yen prices of U.S. exports to Japan.
c. Japanese consumers lose by an increase in the yen price of U.S. exports to Japan.
d. U.S. consumers gain by a decrease in the dollar price of Japanese exports to the United States.
Answer:
$3.86
Explanation:
According to the scenario, computation of the given data are as follow:-
Current price of stock (S0) = $110
Call option at exercise price X is $110
Three month call option price (C) = $6.53
Risk free interest rate = 8%
Price of the three month P.U.T.T option (P) = C - S0 + PV (X)
= $6.53 - $140 + $140 ÷ (1+8%)^(3÷12
)
= $6.53 - $140 + $140 ÷ (1+8%)^.25
= $6.53 - $140 + $140 ÷ 1.019427
= $6.53 - $140 + $137.33
= $3.86
