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Determine the future spot price at which the speculator

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Reference no: EM132507426

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 £?

Reference no: EM132507426

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