21 Speculating with currency call options. Bama plc has sold dollar call options for speculative purposes.

The option premium was £0.04 per unit, and the exercise price was £0.54. Bama will purchase the dollars on the day the options are exercised (if the options are exercised) in order to fulfil its obligation. In the following table, fill in the net profit (or loss) to Bama plc if the listed spot rate exists at the time the purchaser of the call options considers exercising them.

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Possible spot rate at the time the purchaser of the call option (American style) considers exercising them 0.48 0.50 0.52 0.54 0.56 Net profit (loss) per unit to Bama plc 0.58 0.60