I need the steps please: Question 1. An investor enters into a call option contr

Question

I need the steps please:

Question 1. An investor enters into a call option contract with Bank of America for £100,000 at a premium of $0.02 per £. If the exercise price is $0.91 and the spot price of £ at the end of expiration is $0.85, what is this investors' profit (loss) on this contract?

Question 2. anticipates the Canadian dollar to appreciate from its current level of $0.90 to $0.95. She buys Canadian dollar call options at an exercise price of $0.91 and a premium of $0.02. If the future spot rate of the Canadian dollar is $0.95, what is Andrea's profit or loss per unit?

Explanation / Answer

Andrea's profit or loss per unit = 0.02

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