Gretchen Van Damme is considering buying call options on Swiss francs on the International Monetary Market of

Question:

Gretchen Van Damme is considering buying call options on Swiss francs on the International Monetary Market of the Chicago Mercantile Exchange with a March expiration date and a of $0.77/SF. The current spot rate of exchange is $0.77/SF. Gretchen believes that the spot Swiss franc in March will be between $0.74/SF and $0.81/SF, with a most likely value of $0.77/SF.
a. Calculate Gretchen's gain or loss at closing spot rates of $0.74/SF, $0.77/SF, and $0.81/SF.
b. Diagram the value of Gretchen's Swiss franc call option at expiration.
c. Suppose the price of a call option on Swiss francs is $0.02/SF. Diagram the profit or loss on Gretchen's Swiss franc call option at expiration as a function of the underlying S$/SF Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...