Calculate the profit and loss on your portfolio

Reference no: EM131538500

Assume you create a portfolio that consists of a long position in one 9 month call option and a short position in one 9 month put option on euros. Both the call and the put have 100,000 euros attached. The strike price for the call and put options is $1.3 and $1.4, respectively. The call and put premium is $.04 and $.03, respectively.

Calculate the profit/loss (in terms of USD) on your portfolio if the spot rate is .8 euros per dollar when the options expire. Round intermediate steps to four decimals and your final answer to two decimals. Do not use currency symbols or words when entering your response.

Reference no: EM131538500

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