Question

You sell a call option on British pounds receiving a premium of $.02 per unit, with...

You sell a call option on British pounds receiving a premium of $.02 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.68, will the call buyer exercise the option? What is your net gain or loss per unit? What is the net gain or loss for the call buyer?

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