A put option on Australian dollars with a strike price of $.80 is purchased by a speculator

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A put option on Australian dollars with a strike price of $.80 is purchased by a speculator for a premium of $.02. If the Australian dollar’s spot rate is

$.74 on the expiration date, should the speculator exercise the option on this date or let the option expire?

What is the net profit per unit to the speculator? What is the net profit per unit to the seller of this put option?

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International Financial Management

ISBN: 9780538482967

11th Edition

Authors: Jeff Madura

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Question Posted: Oct 16, 2024 09:00 AM

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A put option on Australian dollars with a strike price of $.80 is purchased by a speculator

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International Financial Management

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