Class Assignment: International Finance ………………………………… ………………………

Name CUE identifier

1. The table below presents exchange rates in the beginning and at the end of 2018. Assess which
appreciation and depreciation for each of the possible currency pairs (including cross-rates, i.e.
PLN/RUB currency pair). [6 points]
Currency pair Beginning (Jan 2 nd 2018) End (Dec. 31 st 2018)
EUR/PLN 4.1633 4.3014
EUR/RUB 69.1176 79.7153
PLN/RUB
Euro appreciated/depreciated* against Polish zloty by …....%
Polish zloty appreciated/depreciated * against the euro by …….%
Euro appreciated/depreciated* against the Russian rouble by …….%
Russian rouble appreciated/depreciated* against the euro by …….%
Polish zloty appreciated/depreciated against Russian rouble by …….%
Russian rouble appreciated/depreciated* against Polish zloty by …….%
*
cross out the inappropriate word
2. Table below presents the quotations of the March futures of the Russian rouble (RUB/USD,
notional amount= 2,500,000 Russian rubles). Supposing that the final spot rate (in March 2019)
will be 0.02 (RUB/USD=0.02), what is the profit/loss of the trader, who: [4 points]
a. Buys 5 contracts today
b. Sells 10 contracts today

3. The quotations of the options related to the same currency pair are as in the table below. What would be
the gain/loss of a trader who buys a call option with the strike price of 0.0155 (denoted below as 15500.0) and
what would be the gain/loss for a trader buying a put option with the strike price of 0.015 (denoted below as
15000.0), supposing again that the ending spot price is 0.02 and the notional amount is 2 500 000 RUB. Illustrate
at least one of these options with a chart (use the prior settle price for the premium). [10 points]