Randy purchased a call option on British pounds for $.02 per unit. The strike price was...

Randy purchased a call option on British pounds for $.02 per unit. The strike price was $1.45 and the spot rate at the time the option was exercised was $1.46. Assume there are 31,250 units in a British pound option. What was Randy’s net profit on this option? What is the net profit per unit to the seller of this option?

Expert Solution

jeff jeffy answered 1 year ago

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

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