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In March, a speculator who is gambling that the yen will appreciate against the dollar pays $680 to buy a yen June call option. This
In March, a speculator who is gambling that the yen will appreciate against the dollar pays $680 to buy a yen June call option. This call gives the speculator the right to buy 6,250,000 in June at an exchange rate /$ of 0.0081. By the expiration date, the yen spot rate /$ has risen to 0.0083. What is the investor's net return on the contract?
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