The existing spot rate of the Canadian dollar is US$0.82/C$. The premium on a Canadian dollar

call option is US$.04/C$. The exercise price is US$0.81/C$. The option will be exercised on the

expiration date, if at all. If the spot rate on the expiration date is US$0.87/C$; the profit as a percentof the initial investment (the premium paid) is: (Assume a contract size of C$1,000,000)

(ignore transaction costs)

0%

25%

50%

150%