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An investor is bearish on the euro and believes it will decrease against the Japanese Yen. The investor purchases a currency put option on the

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An investor is bearish on the euro and believes it will decrease against the Japanese Yen. The investor purchases a currency put option on the euro with a strike price (exchange rate) of 135/. When the investor purchases the contract, the spot rate of the euro is equivalent to 133/C. the premium is Y2/C The investor's profit = /C b) Assume the euro's spot price at the expiration date (market price) is 138/ The investor's profit = xie c) What is the maximum loss Maximum loss = V/ d) What the maximum profit Maximum profit = =/

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