Question
1)If the spot rate on the euro is USD1.4200/EUR and the 6-month forward rate is USD1.4123/EUR, the euro is selling forward against the dollar at
1)If the spot rate on the euro is USD1.4200/EUR and the 6-month forward rate is USD1.4123/EUR, the euro is selling forward against the dollar at a _____________
Formula:% change for the currency in the denominator =
Formula: % change for the currency in the numerator =
2)A call option on the euro has a strike price of USD0.9500/EUR and a premium of USD0.0080/EUR with an expiration date three months from now. The contract size is EUR 100,000. Calculate the value for the buyer when the spot price is USD0.9600/EUR.
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Personal Finance
Authors: E. Thomas Garman, Raymond E. Forgue
13th edition
1337099759, 978-1337516440, 1337516449, 978-1337099752
