What is highest net profit possible for speculator based

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1. What is the current price of a share of stock for a firm with $5 million in balance-sheet equity, 500,000 shares of stock outstanding, and a price/book value ratio of 4?

2. A speculator purchases a put option on Australian dollars(with a strike price of $0.85) for $.035 per unit. An Australian dollar option represents 10,000 units. At the time of the purchase, the spot rate of the Australian dollar is $0.86 and continually rises to $0.90 by the expiration date. What is the highest net profit possible for the speculator based on the information above?

a. 0

b. +$150.00

c. -$350.00

d. -$1,250.00

e. -$850.00

Reference no: EM132006295

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