Question
A Euro option costs $0.006 per Euro and gives the right to sell Euro for $1.10. (strike price) Each standard contract unit is 70000 Euro.
A Euro option costs $0.006 per Euro and gives the right to sell Euro for $1.10. (strike price) Each standard contract unit is 70000 Euro.
a. Is this a call or a put option?
b. Would you exercise the option if the Spot rate is 1.08? what would your net gain or loss be
c. Would you exercise the option if the spot price is 1.13? What would be your net loss or gain? d. What is your maximum possible loss here?
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Corporate And Project Finance Modeling Theory And Practice
Authors: Edward Bodmer
1st Edition
1118854365, 9781118854365
