Exam 8: Currency Futures and Options Markets

Suppose that the interbank forward bid for March 20 on Swiss francs is $0.7827 at the same time that the price of IMM Swiss franc futures for delivery on March 20 is $0.7795.How much of an arbitrage profit could a dealer earn per March Swiss franc futures contract of SFr 125,000?

Which of the following has provided a major inducement for speculators to participate in the futures market?

What is the name for the value of the option that is the amount by which the option is in-the-money?

The basic differences)between forward and futures contracts is that

You can speculate on an appreciation of the Japanese yen by

A rise in the foreign interest rate will

Suppose the current spot rate for the Australian dollar is U.S.$0.8321.The intrinsic value of an A$50,000 call option with an exercise price of U.S.$0.8195 is

Suppose you are holding a long position in a euro futures contract that matures in 76 days.The agreed-upon price is $1.15 for 125,000 euro.At the close of trading today,the futures price has risen to $1.155.Under marking to market,you now

Fluor Corporation has just made a French euro bid on a major project located in France.It won't find out for 60 days whether it has won the contract.There will be a 10% signing bonus payable to the winner in euros.The best way to protect against currency risk on its bid is for Fluor to

Which one of the following is credited with an important role on the Chicago Mercantile Exchange because,in the process of realizing profit opportunities,they keep futures rates in line with bank forward rates?

What is the name of the market in the U.S.where trade takes place in currency futures? The

A rise in the domestic interest rate will

You can speculate on a pound depreciation by

major disadvantage of forward and futures contracts relative to options is that the forwards and futures contracts

In the currency futures market,what is the term that describes the number of contracts in a currency outstanding at any one time?

shows how much money must be in the futures market account balance when the contract is first entered into.It is the

Suppose it is January 1990 and the current spot rate for the DM is $0.5925.The call premium on a call option with an exercise price of $0.5675 is $0.0373.What is the intrinsic value of one DM 62,500 call option?

Suppose the current spot rate for the pound is $01.7427.A put option with an exercise price of $01.7550 is said to be

The time value of a European option

The value of a European option always