Option 1 -> Initial investment: Rs. 80,000. Pounds bought: 1,000. Expected value at month-end: Rs. 85,000. Profit: Rs. 85,000 - Rs. 80,000 = Rs. 5,000.
Option 2 -> This amount is too low and doesn't match the calculation of profit from the exchange rate appreciation.
Option 3 -> This is the total value after exchange, not the profit earned.
Option 4 -> This is the initial investment amount, not the profit.
Hence, Option 1: Rs. 5,000 -> The investors invest Rs. 80,000 at the current rate of Rs. 80/pound to buy 1,000 pounds. When the pound appreciates to Rs. 85/pound by month-end, their 1,000 pounds become worth Rs. 85,000. The profit is the difference between the final value and initial investment: Rs. 85,000 - Rs. 80,000 = Rs. 5,000. This represents a gain from currency appreciation. -> correct