You Are a Speculator Who Sells a Put Option on Canadian

question 79

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 the above

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Definitions:

Voluntary Protection Programs

Cooperative initiatives between employers and government agencies to implement or enhance safety and health management systems at workplaces.

Health Insurance

An insurance policy that covers the cost of medical and surgical bills for the person insured.

Spousal Equivalents

Individuals who are not legally married but have a relationship akin to marriage, receiving similar benefits and recognitions in certain contexts.

Common Law Marriage

A legally recognized union that occurs when a couple lives together for a period of time and holds themselves out to friends, family, and the community as being married, but without ever going through a formal ceremony or obtaining a marriage license.