You work for NY Currency Funds in NY. For you to establish your position on S2 after one year, assume that purchasing power parity (PPP) holds for the Canadian dollar to US dollar exchange rate for this operation. The current spot exchange rate is $0.6850/C$. But the Canadian inflation rate is expected to remain at a relatively high rate of 2.5% per annum compared to the U. S. dollar inflation rate of 4.0% per annum. You may choose between the following options on the Canadian dollar for one year:. Option Strike price Premium Put on C$ $0.6800 $0.007/C$ Call on C$ $0.6800 $0.045/C$ a. Should you buy a put on Canadian dollars or a call on Canadian dollars?b. Using your answer to a, what is your breakeven price? c. Using your answer to a, what are your gross profit and net profit (including the premium) on your position for S2. d. Using your answer to c, what is your net profit (including the premium) if you have $1,000,000 to buy the option? What is the Return on Investment (ROI, pa)?

For example, the upper right cell shows that if expresso advertises and beantown doesn't advertise, expresso will make a profit of $15 million, and beantown will make a profit of $2 million. assume this is a simultaneous game and that expresso and beantown are both profit-maximizing firms. if expresso decides to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if expresso decides not to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if beantown advertises, expresso makes a higher profit if it chooses . if beantown doesn't advertise, expresso makes a higher profit if it chooses . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? expresso will choose to advertise and beantown will choose not to advertise. expresso will choose not to advertise and beantown will choose to advertise. both firms will choose to advertise. both firms will choose not to advertise.