Question
Assume that a call option on EUR is written with a strike price of USD1.25/EUR at a premium of 3.80 U.S. cents per euro (USD0.038/EUR)
Assume that a call option on EUR is written with a strike price of USD1.25/EUR at a premium of 3.80 U.S. cents per euro (USD0.038/EUR) and with an expiration date three months from now. This option is for EUR100,000.
Calculate your profit or loss should you exercise before maturity at a time when the EUR is traded spot at:
- USD1.10/EUR
- USD1.18/EUR
- USD1.25/EUR
- USD1.32/EUR
- USD1.35/EUR
- USD1.43/EUR
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Analysis for Financial Management
Authors: Robert Higgins
11th edition
77861787, 978-0077861780
