Highest net profit possible for the speculator


Question: 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:

Solution Preview :

Prepared by a verified Expert
Finance Basics: Highest net profit possible for the speculator
Reference No:- TGS02061799

Now Priced at $20 (50% Discount)

Recommended (97%)

Rated (4.9/5)