1. A call option has an exercise price of $1.50/€ and a premium of $.02/€. A put option has an exercise price of $1.50/€ and a premium of $.04/€. Individual option contracts are for €25,000.

Suppose you sell five puts and sell two calls.

- Your B/E point (in terms of ST) on the downside (that means the lower of the two B/E points) is $____/€.

- Your B/E point (in terms of ST) on the upside is $____/€.

Determine your TOTAL profit or loss at each possible spot rate below.

$1.375/€. My profit/loss is $______________

$1.425/€   My profit/loss is $______________

$1.50/€     My profit/loss is $______________

$1.55/€     My profit/loss is $______________

$1.61/€     My profit/loss is $______________

$1.675/€ My profit/loss is $______________