You Are a Speculator Who Sells a Call Option on Swiss

question 22

Multiple Choice

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 will 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, assuming that you have to buy Swiss francs in the market to fulfill your obligation, is:

• A) -$.02.
• B) -$.01.
• C) $.01.
• D) $.02.
• E) None of these are correct.

Comprehend the evolution and current usage of business letters in professional contexts.

Learn the structure and design elements crucial for effective organization of online content.

Identify the purposes and formats of memorandums in business communication.

Analyze the benefits and limitations of using emails in professional settings.

---

Definitions:

Subsidy

A financial contribution provided by the government to support or promote a particular economic activity or sector.

Elastic Demand

A market condition where the demand for a product changes significantly in response to changes in price.

Inelastic Supply

Refers to a market scenario where the quantity supplied does not change significantly when the price of the product changes.