You have sold a put option on British pound and receive $0.03 per pound. The exercise price is $0.75 per British pound and at expiration the exchange rate was 1.5 British pound per dollar. Compute the net profit if the size of contract is 31,250. a. Net loss $1,666.67 b. Net profit $1,666.67 c. Net profit $0 d. Net loss $3,541.67
You have sold a put option on British pound and receive $0.03 per pound. The exercise price is $0.75 per British pound and at expiration the exchange rate was 1.5 British pound per dollar. Compute the net profit if the size of contract is 31,250. a. Net loss $1,666.67 b. Net profit $1,666.67 c. Net profit $0 d. Net loss $3,541.67
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 41QA
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