Exhibit 13-7
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 101

Multiple Choice

Exhibit 13-7
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{|l|l|l|c|}\hline \text { Option Type } & & \text { Currency } & {\text { Canadian dollar }} \\\hline \begin{array}{l}\text { Contract } \\\text { Size }\end{array} & & 50000 &{\text { Canadian dollars }} \\\hline \text { Expiry } & & \text { April } & \mid\\\hline & & &\mid \\\hline \text { Strike } & \text { Call } & \text { Put } & \mid \\\hline \$ 0.815 & \$ 0.0118 & &\mid \\\hline \$ 0.820 & & \$ 0.0068 & \mid\\\hline\end{array}$
-Refer to Exhibit 13-7. If the spot rate at expiration is $0.90 and the call option was purchased, what is the dollar gain or loss?

• A) $0
• B) $3750 gain
• C) $3660 gain
• D) $4650 loss
• E) $2680 loss

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Definitions:

Medicare

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger people with disabilities.

Social Security System

A government program that provides financial assistance to people with insufficient or no income, typically covering the elderly, disabled, and unemployed.

Unemployment Compensation

A state government transfer program that pays cash benefits for a certain period of time to laid-off workers who have worked for a specified period of time for a covered employer.

Assistance Program

A governmental or organizational initiative designed to provide support, financial or otherwise, to individuals or groups in need.