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An investor is bulishi on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call optian on the

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An investor is bulishi on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call optian on the euro with a strike price fexchange ratej of 12316. When the investor purchases the contract, the spot rate of the euro is equivalent to 7124/. Assume the euro's spot price at the expiration date (market price) is 134.6. the premium is 74/ a) Assume the euro's soot price at the expiration date (market price) is 813 d/e The investor's profit = yie b) Assume the euros soot drice at the expirabion date (market pice is in216 The investor's profit = Fie c) What is the maximum loss Maximum loss = yie

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