What is the net profit per unit to the speculator


Response to the following problem:

A put option on Australian dollars with a strike price of $.80 is purchased by a speculator for a premium of $.02. If the Australian dollar's spot rate is $.74 on the expiration date, should the speculator exercise the option on this date or let the option expire?

What is the net profit per unit to the speculator? What is the net profit per unit to the seller of this put option?

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Accounting Standards: What is the net profit per unit to the speculator
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