Assume that a british pound put option has a premium of 03, Ask an Expert

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Assume that a British pound put option has a premium of $.03 per unit and an exercise price of $1.60. The present spot rate is $1.61. The expected future spot rate on the expiration date is $1.51. The option will be exercised on this date, if at all. What is the expected per unit net gain (or loss) resulting from purchasing the put option?

a. $.01 loss

b. $.06 gain

c. $.05 gain

d. $.09 loss

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92367363

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