The Existing Spot Rate of the Canadian Dollar Is

Multiple Choice

The existing spot rate of the Canadian dollar is $.82. The premium on a Canadian dollar call option is $.04. The exercise price is $.81. The option will be exercised on the expiration date if at all. If the spot rate on the expiration date is $.87, the profit as a percent of the initial investment (the premium paid) is:

A) 0 percent
B) 25 percent
C) 50 percent
D) 150 percent
E) None of these are correct.