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1. (6 points) France Heinz works as a currency specu lator for Fidelity & Co of London. Her e position is to profit from her
1. (6 points) France Heinz works as a currency specu lator for Fidelity & Co of London. Her e position is to profit from her expectation that the U.S. dollar will rise .20/E. She must choose significantly against the British Pound. The current spot rate is i between the following 60-day options on the British Pound: Option Premium Strike Price Put on British pound Call on British Pound $0.003/5 $1.25/8 50.046/ $1.25E a. Should France buy a put on British Pound or a call on British pound? b. What i (a)? s France's breakeven price on the option purchased in part Using your answer from part (a), what is France's gross profit and net profit (including mium) ifthe spot rate at the end of 60 days is $1.40/E
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