Speculating with Currency Put Options
Response to the following problem:
Bulldog, Inc., has sold Australian dollar put options at a premium of $.01 per unit, and an exercise price of $.76 per unit. It has forecasted the Australian dollar's lowest level over the period of concern as shown in the below table.
Determine the net profit (or loss) per unit to Bulldog, Inc., if each level occurs and the put options are exercised at that time.
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NET PROFIT (LOSS) TO BULLDOG, INC.
IF VALUE OCCURS
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$.72
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.73
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.74
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.75
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.76
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