Arthur Doyle is a currency trader for Baker Street, a private investment house in London. Baker Street's clients are a collection of wealthy private investors who, with a minimum stake of each, wish to speculate on the movement of currencies.

Baker Street. Arthur Doyle is a currency trader for Baker Street, a private investment house in London. Baker Street's clients are a collection of wealthy private investors who, with a minimum stake of 220,000 each, wish to speculate on the movement of currencies. The investors expect annual returns in excess of 25%. Although officed in London, all accounts and expectations are based in U.S. dollars. Arthur is convinced that the British pound will slide significantly-possibly to $1.3200=1.00-in the coming 30 to 60 days. The current spot rate is $1.4261=1.00. Arthur wishes to buy a put on pounds, which will yield the 25% return expected by his investors. Which of the following put options, , would you recommend he purchase? Prove your choice is the preferable combination of strike price, maturity, and up-front premium expense. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Baker Street. Arthur Doyle is a currency trader for Baker Street, a private investment house in London. Baker Street's clients are a collection of wealthy private investors who, with a minimum stake of 220,000 each, wish to speculate on the movement of currencies. The investors expect annual returns in excess of 25%. Although officed in London, all accounts and expectations are based in U.S. dollars. Arthur is convinced that the British pound will slide significantly-possibly to $1.3200=1.00-in the coming 30 to 60 days. The current spot rate is $1.4261=1.00. Arthur wishes to buy a put on pounds, which will yield the 25% return expected by his investors. Which of the following put options, , would you recommend he purchase? Prove your choice is the preferable combination of strike price, maturity, and up-front premium expense. Data table (Click on the following icon in order to copy its contents into a spreadsheet.)