Question $4$

Your firm is holding $50,000$ GBP$.$ Instead of converting the unneeded GBP back

to dollars, the firm has decided to hold onto the $50,000$ pounds and write calls.

Suppose you sell five $10,000$ pound calls for a specified time in the future with a

strike price of $$1\mathrm{.}35$ per GBP$.$ Suppose that the current spot rate is $$1\mathrm{.}27$ per

GBP$.$ If each contract is sold at $2$ cents per pound, what is the maximum total

profit the firm can receive from selling the calls?

$$1,500$

$$1,000$

$$300$

$$200$

Question $5$

How many total dollars will the firm receive, factoring in both the exchange and

the premium, if the options in Question $4$ are exercised?

$$68,500$

$$66,500$

$$69,000$

$$66,700$

$$67,500$

$*****$ I ONLY NEED HELP WITH QUESTION $5.$ I ALREADY KNOW HOW TO DO $4.$ IT IS JUST PROVIDED FOR INFORMATION. THANKS