A Bear spread is combined:

(1) Buying 2 call option with the strike price of $1.6200/GBP and an option premium of 0.05 cents/GBP

(2) Selling 2 call option with the strike price of $1.6050/GBP and an option premium of 2.40 cents/GBP

3.1. The break-even price ofbuying 2 call option in this case (1 mark)

A. 1.625 USD/GBP

B. 1.61 USD/GBP

C. 1.57 USD/GBP

D. Other_______________________

3.2. The break-even price of selling 2 call option in this case (1 mark)

A. 1.581 USD/GBP

B. 1.653 USD/GBP

C. 4.005 USD/GBP

D. Other_____________________

3.3. For what range of spot rate would this strategy lead to get a profit? (1.5 marks)

A. St < 3.248 USD/GBP

B. St > 1.348 USD/GBP

C. St = 2.348 USD/GBP

D. Other_______________________

3.4. For what range of spot rate would this strategy lead to gain loss? (1.5 marks)

A. St < 3.248 USD/GBP

B. St > 1.348 USD/GBP

C. St = 2.348 USD/GBP

D. Other______________________