A speculator is considering the purchase of two three-month British pound call options with a striking price
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Question:
A speculator is considering the purchase of two three-month British pound call options with a striking price of $1.56 per . The premium is $0.03 per pound.The standard size of each option contract is 10,000 pounds.
- Determine the future spot price at which the speculator will only break even.
- What would be the speculator's profit if the pound depreciates to $1.54 per ?
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