You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 mo and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is paya both entry and exit and is USD 12.21. What is the net profit on this transaction in O a. -190,946.52 O b. -31,824.42
You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 mo and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is paya both entry and exit and is USD 12.21. What is the net profit on this transaction in O a. -190,946.52 O b. -31,824.42
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD strike
price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 month
and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is payable on
both entry and exit and is USD 12.21. What is the net profit on this transaction in USD?
O a. -190,946.52
O b. -31,824.42
O c. -190,800.00
d. -190,873.26
O e. -55,800.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95a2e371-d4dc-4062-8b7a-9c784a2913e7%2F42b85fbd-1b8a-493a-86bd-cfc81e7d0b65%2Fspbcjvu_processed.png&w=3840&q=75)
Transcribed Image Text:You buy 6 call options with a contract size of AUD 30,000. They have a USD/AUD strike
price of 0.57 and a premium of 7.86 (USD/AUD). You hold these options for 1 month
and then sell them for 6.8 (USD/AUD). The brokerage fee on each contract is payable on
both entry and exit and is USD 12.21. What is the net profit on this transaction in USD?
O a. -190,946.52
O b. -31,824.42
O c. -190,800.00
d. -190,873.26
O e. -55,800.00
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