You Are a Speculator Who Sells a Call Option on Swiss

question 56

Multiple Choice

You are a speculator who sells a call option on Swiss francs for a premium of $.06,with an exercise price of $.64.  The option will not be exercised until the expiration date,if at all.  If the spot rate of the Swiss franc is $.69 on the expiration date,your net profit per unit,assuming that you have to buy Swiss francs in the market to fulfil your obligation,is:

• A) $.02.0
• B) $.01.
• C) $.01.0
• D) $.02.
• E) none of the above

Understand the implications of callable bonds and their pricing.

Understand the concept of Mean Time Between Failures (MTBF) and its inverse relationship with failure rates.

Calculate weekly total maintenance costs and understand the impact of preventive maintenance.

Calculate expected breakdown costs and understand the financial implications of machine failures.

---

Definitions:

Fair-Use Doctrine

The lawful use of a limited portion of another’s work for purposes of criticism, comment, news reporting, teaching, scholarship, and research that does not reduce the commercial value of the protected property.

Copyright Liability

Refers to the legal responsibility arising from the unauthorized use, reproduction, or distribution of copyrighted material.

Intangible Property

Property that does not have a physical substance but possesses value, such as patents, copyrights, trademarks, and goodwill.

Bank Account

A financial account maintained by a bank or another financial institution in which the depositor can store money and make transactions.