Muncie widget inc bought euro futures call option for a, Ask an Expert

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Muncie Widget Inc. bought euro futures call option for a strike price of $1.35 for September, 2017 paying 2.50 cents per unit. When they exercised the option, the spot price was $1.5875. There are 125,000 units per euro futures option. Please a) calculate the break-even point for this option and b) compute the total net profit/loss & the rate of return on the (option premium) investment.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92642508

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