You Are a Speculator Who Sells a Put Option on Canadian

question 140

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:

Nonwrongfully Dissociated

Pertains to a situation where a partner leaves a partnership in accordance with the terms of the partnership agreement or without causing harm to the partnership’s ability to continue.

Demand Payment

A request for the payment of money owed, usually in a formal or legal context.

Within Days

A phrase indicating that a specific action or event is to occur within a defined number of days from a certain point in time.

Partnership

A partnership is a legal form of business operation between two or more individuals who share management and profits.