Solution: total receipts = Singapore dollars 10,000,000 x .55 = $5,500,000
total premium = Singapore dollars 10,000,000 x .05 = 500,000
net receipts = $5,000,000 27. The premium for a British put pound with an exercise price of $1.70 is $.05. What is the breakeven spot rate for the buyer of the put?
A. $1.70.
* B. $1.65.
C. $1.75.
D. $1.60.
E. $2.10.
Solution: breakeven point = $1.70 - $0.05 = $1.65 28. You purchase a call option on British pounds for a premium of $.04 per unit with an exercise price of $1.65. The option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.67, your net profit or net loss per unit is:
