You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.65, your net profit per unit is:

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Business

Mariah Woodward

18 April, 03:08

You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.65, your net profit per unit is:

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Answers (1)

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Braylen Patel · Answer 1

The answer is = -$0.02or ($0.02)

Explanation:

Exercise price or strike price is the price at which the owner of an option can buy or sell the underlying asset.

Spot price is the immediate or prevailing price of an underlying asset.

Spot rate on the expiration date is $1.65

exercise price of $1.64

Premium of $.03 per unit

Net profit per unit is:

$1.65 - $1.64 - $0.03

=-$0.02or ($0.02)