What is Carla net profit in USD

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Question - Carla works for CIBC Currency Funds in Toronto. She believes the Canadian dollar (C$) will appreciate versus the U.S. dollar over the coming 90 days. The current spot rate is $0.750/C$. Carla may choose between the following options on the Canadian dollar: Each option contract will exchange CAD1,000 or its equivalent USD value.

Option

Strike Price

Premium

Put on C$(allow the option holder to sell canadian dollar at strike price)

$0.7200/C$

USD0.0004/CAD

Call on C$(allow the option holder to buy canadian dollar at strike price)

$0.7200/C$

USD0.0003/CAD

Required - What is Carla's net profit (including premium) in USD if she sells the 50 put contracts on C$ and the ending sport rate is US0.76/C$?

Reference no: EM133089693

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