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Assume you have purchased a put option on the Euro for a premium of $0.0200 with an exercise price of $1.2400. A. If on the

Assume you have purchased a put option on the Euro for a premium of $0.0200 with an exercise price of $1.2400.

A. If on the expiration date the spot rate of the Euro is $1.2745, will you exercise the put option if you are a rational investor? Why or why not?

B. What is your overall net gain or loss for owning this put option per unit in US dollars as a rational investor?

C. What is your overall net gain or loss per contract in US dollars if the contract size is 62,500?

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