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 $250,000$ 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$$possibly to $$\frac{1\mathrm{.}3200}{}-$in the coming $30$ to $60$ days. The current spot rate is $$\frac{1\mathrm{.}4258}{}.$ 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.

Because his expectation is for $"30$ to $60$ days" he should confine his choices to the $60-$day options to be sure and capture the timing of the exchange rate change. $($Select from the drop$-$down menu.$)$

The return on investment $(ROI)$ at the strike price of $$\frac{1\mathrm{.}36}{}$ is

$\%.($Round to the nearest integer.$)$

Data table

$($Click on the icon to import the table into a spreadsheet.$)$

$\backslash$table$[[$Strike Price,Maturity,Premium$],[$$$\frac{1\mathrm{.}36}{},30$ days,$$\frac{0\mathrm{.}00081}{}$

Also need ROI on strike price of $$1\mathrm{.}34/$ and $$1\mathrm{.}32/$