You Are a Speculator Who Sells a Put Option on Canadian

question 54

Multiple Choice

You are a speculator who sells a put option on Canadian 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 Canadian dollar is $.78 on the expiration date, your net profit per unit is:

• A) -$.08.
• B) -$.03.
• C) $.05.
• D) $.08.
• E) None of these are correct.

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