-21 >> FIN 330-1 (Lec) >> International Finance Abdalla is a currency trader for RBC Canada. He believes that the Canadian dollar (C$) will depreciate versus the U.S. dollar over the coming 120 days. The current spot rate is C$1.3131/$. He may choose between the following options on the Canadian dollar: Option Strike Price Put on C$ C$1.3421/$ C$1.3421/$ Premium $0.00004/C$ $0.00059/C$ Call on C$ 1. Recommend whether he should buy a put or a call on Canadian dollar. Justify your answer. 2. Estimate the breakeven price on the option purchased in part (a). 3. Using your answer from part (a), estimate gross profit and net profit if the spot rate at the end of 120 days is indeed C$1.3628/$. 4. Using your answer from part (a), re-estimate the gross profit and net profit if the spot rate at the end of 120 days is C$1.2510/$