Question

You are a speculator who sells a call option on Australian dollars for a premium of $.03 per unit, with an exercise price of $.86. The option will not be exercised until the expiration date, if at all. If the spot rate of the Australian dollar is $.78 on the expiration date, your net profit per unit is:______.
a. -$0.02.
b. -$0.01.
c. $0.01.
d. $0.02.
e. none of the above.

Answer 1

Answer:

option e. none of the above.

Explanation:

The answer from the event that happened and was discussed is "none of the above ". The price of the which it is been sold is a exercise price which is $0.86. When the net profit is been calculate at $0.78, the values gotten will be higher, compere to all the values which are given in the options. So therefore, the correct option in the options listed is e. Which is none of the above because.

Answer 2

Answer:

e. none of the above.

Explanation:

Based on the scenario being described within the question it can be said that your net profit per unit is none of the above. This is because since you are selling and the exercise price was set at $0.86 then the price lowering to 0.78 means that you sold at a much higher price than market value, which leads to about 0.08 profit per unit.