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

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An investor is bullish on the euro and believes it will increase against the Japanese Yen. The investor purchases a currency call option on the euro with a strike price (exchange rate) of 124/6. When the investor purchases the contract, the spot rate of the euro is equivalent to 126/. Assume the euro's spot price at the expiration date (market price) is $133/6. the premium is 3/ a) Assume the euro's spot price at the expiration date market price) is $133/6 The investor's profit = XIC b) Assume the euro's spot price at the expiration date market price) is 122/ The investor's profit - WE c) What is the maximum loss Maximum loss VIE

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