1. A speculator purchases a put option on Canadian dollars(with a strike price of $0.86) for $.015 per unit. A Canadian dollar option represents 62,500 units. At the time of the purchase, the spot rate of the Canadian dollar is $0.87 and continually rises to $0.89 by the expiration date. What is the highest net profit possible for the speculator based on the information above?

$0

-$937.50

-$625.00

+$312.50

-$1,562.50

2. Currency futures options are options on a currency futures contract. Exercise of a currency futures option results in a short futures position 

for the buyer (holder) of a put.

for the buyer (holder) of a call.

for the writer (seller) of a put.