Suppose you are a speculator and you can buy or sell a 3-month put option on Canadian dollars with a strike price of 0.80 USD/CAD and a call premium of 0.04 USD/CAD. The current spot rate is 0.7413 USD/CAD, and you expect the CAD to appreciate by 2.5% over the next 3-months, a. Graph the cash flow schedule from the perspective of the buyer & the seller of the option. Be sure to clearly label profits, losses, the break-even point, and at what point the option is exercised. b. Should you buy or sell this 3-month European put option on 100,000 CAD? What is your expected profit? G If the spot rate turns out to be 0.82 USD/CAD in three months, what is your realized profit?

2. Suppose you are a speculator and you can buy or sell a 3-month put option on Canadian dollars with a strike price of 0.80USD/CAD and a call premium of 0.04USD/CAD. The current spot rate is 0.7413 USD/CAD, and you expect the CAD to appreciate by 2.5% over the next 3 -months, a. Graph the cash flow schedule from the perspective of the buyer \& the feller of the option. Be sure to clearly label profits, losses, the break-even point, and at what point the option is exercised. b. Should you buy or sell this 3-month European put option on 100,000 CAD? What is your expected profit? . If the spot rate turns out to be 0.82USD/CAD in three months, what is your realized profit? 2. Suppose you are a speculator and you can buy or sell a 3-month put option on Canadian dollars with a strike price of 0.80USD/CAD and a call premium of 0.04USD/CAD. The current spot rate is 0.7413USD/CAD, and you expect the CAD to appreciate by 2.5% over the next 3 -months, a. Graph the cash flow schedule from the perspective of the buyer \& the feller of the option. Be sure to clearly label profits, losses, the break-even point, and at what point the option is exercised. b. Should you buy or sell this 3-month European put option on 100,000 CAD? What is your expected profit? c. If the spot rate turns out to be 0.82 USD/CAD in three months, what is your realized profit