In March, a derivatives dealer offers you the following quotes for June British pound option contracts $($expressed in U$.$S$.$ dollars per GBP$)$:

MARKET PRICE OF CONTRACT

Contract Strike Price Bid Offer

Call USD$1\mathrm{.}440\mathrm{.}06280\mathrm{.}0635$

Put $0\mathrm{.}02460\mathrm{.}0253$

Call USD$1\mathrm{.}480\mathrm{.}04350\mathrm{.}0442$

Put $0\mathrm{.}04080\mathrm{.}0415$

Call USD$1\mathrm{.}520\mathrm{.}02460\mathrm{.}0253$

Put $0\mathrm{.}06280\mathrm{.}0635$

Assuming each of these contracts specifies the delivery of GBP $31,250$ and expires in exactly three months, complete a table similar to the following $($expressed in dollars$)$ for a portfolio consisting of the following positions:

Long one $1\mathrm{.}48$ call

Short one $1\mathrm{.}52$ call

Long one $1\mathrm{.}44$ put

Short one $1\mathrm{.}48$ put

Do not round intermediate calculations. Round your answers to the nearest cent. Enter the net initial costs as negative values. Use a minus sign to enter negative values. If the answer is zero, enter $"0".$

June

USD$/$GBP Net Initial

Cost Long Call $1\mathrm{.}48$

Profit Short Call $1\mathrm{.}52$

Profit Long Put $1\mathrm{.}44$

Profit Short Put $1\mathrm{.}48$

Profit Total Net

Profit

$$1\mathrm{.}40$ $

$

$

$

$

$

$$1\mathrm{.}44$ $

$

$

$

$

$

$$1\mathrm{.}48$ $

$

$

$

$

$

$$1\mathrm{.}52$ $

$

$

$

$

$

$$1\mathrm{.}56$ $

$

$

$

$

$

Choose the correct graph of the total net profit $($i$.$e$.,$ cumulative profit less net initial cost, ignoring time value considerations$)$ relationship using the June USD$/$GBP rate on the horizontal axis.

The correct graph is

$-$Select$-$

$.$

A$.$

B$.$

C$.$

D$.$

What is the breakeven point? Do not round intermediate calculations. Round your answer to four decimal places.

$

What is the nature of the currency speculation represented by this portfolio?

The position resembles a

$-$Select$-$

spread. The purchaser of this portfolio predicts a moderate

$-$Select$-$

of the USD$/$GBP rate.

If in exactly one month $($i$.$e$.,$ in April$)$ the spot USD$/$GBP rate falls to $1\mathrm{.}370$ and the effective annual risk$-$free rates in the United States and England are $6\mathrm{.}0\%$ and $7\mathrm{.}5\%,$ respectively, calculate the equilibrium price differential that should exist between a long $1\mathrm{.}48$ call and a short $1\mathrm{.}48$ put position. $($Hint: Consider what sort of forward contract this option combination is equivalent to and treat the British interest rate as a dividend yield.$)$ Assume that exactly $2$ months left to expiration of the options. Do not round intermediate calculations. Round your answer to four decimal places. Use a minus sign to enter a negative value, if any.