The dollar to the euro is quoted at $1.1240/ today. Call options on the euro with an exercise price of $1.1220/ and expiration in three months are selling for $0.0320/. Each option contract is for 62,500. You start with $120,000.

1.) If you buy the euro calls, how much premium do you pay per contract?

2.) How many call contracts can you buy?

3.) If in three months the exchange rate is $1.1280/: would you exercise? what would be the total payoffs? and what would be the total profits/losses?