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

question 26

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 $0.85 and the put option was purchased, what is the dollar gain or loss?

• A) $340 loss
• B) $125 gain
• C) $750 gain
• D) $750 loss
• E) $200 loss

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Definitions:

Poly(Ethylene Terephthalate)

A thermoplastic polymer used in fibers for clothing, containers for liquids and foods, and in thermoforming for manufacturing.

Orlon

A synthetic fiber made from a polymer acrylonitrile, used primarily in textiles.

Poly(Acrylonitrile)

A polymer made from acrylonitrile monomers, commonly used in the production of synthetic fibers and plastics.

Hydrolyzed

A chemical process where a compound is broken down into smaller molecules by the addition of water.