Question
PROBLEM 6 (10 POINTS): A speculator purchases a put option on British Pounds for 0.05$ per unit; the strike price is 1.50$. A pound option
PROBLEM 6 (10 POINTS):
A speculator purchases a put option on British Pounds for 0.05$ per unit; the strike price is 1.50$.
A pound option represents 31.250 units
Assume that at the time of the purchase, the spot rate of the pound is 151$ and continually rises to 1.62$ by the expiration date.
- Compute the highest net profit possible for the speculator based on the information above?
- Compute the highest profit/loss for the seller of this put option?
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MATLAB An Introduction With Applications
Authors: Amos Gilat
6th Edition
111938513X, 978-1119385134
