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Net profit per unit You want you to buy 1.55 million British pounds (GBP) using call options and foreign exchange market. The following four
Net profit per unit You want you to buy 1.55 million British pounds (GBP) using call options and foreign exchange market. The following four figures provide the market information on the GBP options, which expires in 5-month. How much can you make a net profit or a net loss for GBP1.55 million if the spot rate is A$1.9698 at the maturity (i.e., after 5 months)? (enter the whole number without sign and symbol). Net profit per unit Contingency graph for purchasers of British pound call options Exercise price A$1.50 +A$0.06 +A$0.04 Premium +A$0.02 = A$0.02 Future Spot Rate A$1.46 A$1.48 A$1.50 $1.52 A$1.54 -A$0.02 -A$0.04 -A$0.06 Net profit per Unit Contingency graph for purchasers of British pound put options +A$0.06 Exercise price = A$1.50 +A$0.04 Premium =A$0.03 +A$0.02 Future spot rate -A$0.02 -A$0.04 -A$0.06 A$1.46 A$48 A$1.50 A$1.52 A$1.54 Contingency graph for sellers of British pound call options Contingency graph for sellers of British pound put options +A$0.06 +A$0.06 Exercise price = A$1.50 Exercise price = A$1.50 +A$0.04 Premium =A$0.02 +A$0.04 Premium = A$0.03 +A$0.02 A$1.46 A$1.48 A$1.50 A$1.52 A$1.54 -A$0.02 -A$0.04 Future spot rate Net profit per unit +A$0.02 AS 16 A$1.48 A$1.50 A$1.52 A$1.54 -A$0.02 Future spot rate -A$0.04 -A$0.06 -A$0.06
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