Question: Use the following information to answer this question: The current spot exchange rate is $1.25 = 1.00 and the three-month forward rate is $1.30 =

Use the following information to answer this question: The current spot exchange rate is $1.25 = 1.00 and the three-month forward rate is $1.30 = 1.00. Consider a three-month call option on 62,500 with a strike price of $1.20 = 1.00. The option premium is $5000.If you buy three contracts and the future spot rate is 1.27, what is your profit/loss from this contract? Select one: a. -1,500 dollar b. +1,500 dollar c. -1,875 dollar d. +1,200 dollar

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