Question
You purchase a six month $1.25 strike put option on the British pound for $0.12 per unit. Each option contract covers 31,250 British pounds. On
You purchase a six month $1.25 strike put option on the British pound for $0.12 per unit. Each option contract covers 31,250 British pounds. On the expiration date, the spot rate for the British pound is $1.01. Assuming you are an astute investor, what is your profit (+) or loss (-) on the call option? Round your final answer to two decimal places (Ex. $0.00).
You purchase a six month $1.10 strike call option on the euro for $0.14 per unit. Each option contract covers 10,000 euros. On the expiration date, the spot rate for the euro is $1.04. Assuming you are an astute investor, what is your profit (+) or loss (-) on the call option? Round your final answer to two decimal places (Ex. $0.00).
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