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A speculator is considering the purchase of one three-month call option on USD with an exercise price of 0.9709 EUR per USD. The premium is
A speculator is considering the purchase of one three-month call option on USD with an exercise price of 0.9709 EUR per USD. The premium is 0.0371 EUR. The current spot price as of December 1,2022 is 0.9511 EUR per USD and the 90-day forward rate is 0.9446 EUR per USD. The speculator believes that the U.S. dollar will appreciate against the euro to 1.0204 EUR per USD over the next three months. As the speculator's assistant, you have been asked to prepare the followings: 1. Graph the profit/loss diagram of the call option in an Excel spreadsheet. 2. Determine the speculator's profit if the USD appreciates to 1.0204 EUR per USD. 3. Determine the speculator's profit/loss if the USD depreciates to the forward rate. 4. Determine the future spot price at which the speculator will only break even
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