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(12 points) An investor is wondering if he should enter the option market for speculation or hedging purposes. Assume that the dollarpound spot rate is

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(12 points) An investor is wondering if he should enter the option market for speculation or hedging purposes. Assume that the dollarpound spot rate is $1.8/ .19, and it might go up to $1.9/.' or down to $1.7/ in the next 6 months. The annual U.S. dollar rate is 4% and the pound rate is 6%. The Strike price is $1.79/

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