# Currency Strangles The following information is currently available for Canadian dollar (CS) options (see Appendix B in this chapter): Put option exercise price = \$0.75. Put option premium = \$0.014 per unit. Call option exercise price = \$0.76. Call option premium = \$0.01 per unit. One option contract represents C \$50,000. What is the maximum possible gain that the purchaser of a strangle can achieve using these options? What is the maximum possible loss that the writer of a strangle can incur? Locate the break-even point(s) of the strangle.

FindFind

### International Financial Management

14th Edition
Publisher: Cengage
ISBN: 9780357130698
FindFind

### International Financial Management

14th Edition
Publisher: Cengage
ISBN: 9780357130698

#### Solutions

Chapter 5, Problem 33QA
Textbook Problem

## Currency Strangles The following information is currently available for Canadian dollar (CS) options (see Appendix B in this chapter):Put option exercise price = \$0.75.Put option premium = \$0.014 per unit.Call option exercise price = \$0.76.Call option premium = \$0.01 per unit.One option contract represents C \$50,000. What is the maximum possible gain that the purchaser of a strangle can achieve using these options? What is the maximum possible loss that the writer of a strangle can incur? Locate the break-even point(s) of the strangle.

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