Question
A speculator purchases a call option on British pounds. The option has a strike price of $1.55 and costs $.02 per unit. A pound option
A speculator purchases a call option on British pounds. The option has a strike price of $1.55 and costs $.02 per unit. A pound option represents 31,250 units. The spot rate is $1.61, and decreases to $1.55 by expiration. Calculate the profit or loss on the option.
| $1,875 |
| -$1,875.00 |
| $625.00 |
| -$625.00 |
| none of the above |
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Introduction To Finance Markets, Investments, And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
17th Edition
1119561175, 978-1119561170
