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 $1.20. Assuming you are an astute investor, what is your profit (+) or loss (-) on the put option? Round your final answer to two decimal places (Ex. $0.

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 $1.20. Assuming you are an astute investor, what is your profit (+) or loss (-) on the put option? Round your final answer to two decimal places (Ex. $0.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 3IEE

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