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miv72 [106K]
3 years ago
14

You are a speculator who sells a call option on Swiss francs for a premium of $.06, with an exercise price of $.64. The option w

ill not be exercised until the expiration date, if at all. If the spot rate of the Swiss franc is $.69 on the expiration date, your net profit per unit is:
a.-$.02.
b.-$.01.
c. $.01
d. $.02
e.None of the above.
I know the answer is C(.01) but don't know how. please list formula and work.
Business
1 answer:
Ksivusya [100]3 years ago
6 0

Answer:

c. $.01

Explanation:

The computation of the net profit per unit is shown below:

= Exercise price + Premium - Spot rate on the expiration date

= $0.64 + $0.06 - $0.69

= $0.01

To find out the net profit per unit we added the premium and deducted the spot rate on the expiration date to the exercise price so that the true value per unit can come.

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Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of i
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Fall

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I hope my answer helps you

5 0
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Paula earns $40,000 per year and rides her bicycle to work. There is a 1% chance that she will break her leg in the next year an
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Answer:

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The computation of the premium pay for the next year is shown below:

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8 0
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The inventory costing method that reports the earliest costs in ending inventory is:_______
nikdorinn [45]

Answer:

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