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 $1.65, your net profit per unit is:
A) -$.03.
B) -$.02.
C) -$.01.
D) $.02.
E) none of the above

Question

Quizplus · Accepted Answer

Net profit per unit = $1.65 - $1.64 - $.03 = -$.02.

You Purchase a Call Option on Pounds for a Premium