Assume That a Speculator Purchases a Put Option on British

question 161

Multiple Choice

Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound option 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:

• A) $1,562.50.
• B) -$1,562.50.
• C) -$1,250.00.
• D) -$625.00.

Distinguish between presentations designed to inform and those designed to actuate.

Recognize the role and perception of evidence in influencing audience perspectives.

Assess speaker dynamism and its impact on persuasive communication.

Understand the ethical responsibilities of speakers in persuasive settings.

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Definitions:

Debit Column

The left-hand side of a ledger account, recording increases in assets and expenses, and decreases in liabilities, equity, and revenue.

Expense Recognition Principle

An accounting principle that dictates expenses should be recognized in the period in which they are incurred to earn revenues.

Efforts

The use of physical or mental energy to achieve tasks and goals.

Accomplishments

Achievements or completed goals that an individual or organization has successfully attained.