Question Details

Brian Tull sold a put option on Canadian dollars 



1. Using Currency Futures.
a. How can currency futures be used by corporations?
b. How can currency futures be used by speculators?

2. Selling Currency Put Options. Brian Tull sold a put option on Canadian dollars for $.03 per unit.
The strike price was $.75, and the spot rate at the time the option was exercised was $.72. Assume
Brian immediately sold off the Canadian dollars received when the option was exercised. Also
assume that there are 50,000 units in a Canadian dollar option. What was Brian- net profit on the
put option?




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