The current spot exchange rate is $1.30 = 1.00 and the three-month forward rate is $1.26 = 1.00. You buy a put option on 62,500 with a strike price of $1.34 = 1.00 and pay an option premium (price) of $0.07 per euro. If the exchange rate at expiration is $1.38 = 1.00, what is your profit or loss from the option position?

Answer Options:

loss of $1,875

loss of $1,875

gain of $2,500

gain of $1,875

loss of $4,375

loss of $2,500