Question Details

 Alice Duever purchased a put option on British pounds 


1. Speculating with Currency Put Options. Alice Duever purchased a put option on British pounds
for $.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was
exercised was $1.59. Assume there are 31,250 units in a British pound option. What was Alice-
net profit on the option?

2. Speculating with Currency Put Options. Bulldog, Inc., has sold Australian dollar put options at
a premium of $.01 per unit, and an exercise price of $.76 per unit. It has forecasted the Australian
dollar- lowest level over the period of concern as shown in the following table. Determine the net
profit (or loss) per unit to Bulldog, Inc., if each level occurs and the put options are exercised at
that time.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help