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The following graph shows the contingency graph for purchasers of euro call options, with a premium of $0.08 and an exercise price of $1.38. ?
The following graph shows the contingency graph for purchasers of euro call options, with a premium of $0.08 and an exercise price of $1.38. ? 0.09 0.08 O 0.07 0.06 0.05 0.04 0.03 0.02 0.01 NET PROFIT PER UNIT (Dollars per unit) O 0 -0.01 -0.02 -0.03 -0.05 -0.06 -0.07 -0.08 -0.09 1.34 1.52 1.36 1.38 1.40 1.42 1.44 1.46 1.48 1.50 FUTURE SPOT RATE (Dollars per euro) $0.04 $0.06 $0.01 $0.03 According to the graph, if the spot rate turns out to be $1.44, and the option is exercised, the buyer will per unit. According to the graph, break-even price is $1.42
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