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Andrej [43]
2 years ago
10

Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $0.05 per unit. A pound opt

ion represents 31,250 units. Assume that at the time of the purchase, the spot rate of the pound is $1.51 and continually rises to $1.62 by the expiration date. The highest net profit possible for the speculator based on the information above is: Group of answer choices $1,562.50 -$1,250.00 -$625.00 -$1,562.50
Business
1 answer:
gladu [14]2 years ago
6 0

Answer:

-$1,562.50

Explanation:

Calculation to determine The highest net profit possible for the speculator based

Premium of the option = $.05 per unit * (31,250 units)

Premium of the option= -$1,562.50

Therefore Based on the information given and the above calculation The HIGHEST NET PROFIT that will be possible for the speculator will be -$1,562.50

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The correct answer is that Gloria would have to invest $75,581 today at the rate of 7.25 % to receive $100000 in four years,hence option is correct

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