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Calculate the U.S. dollar profit or loss for the put option @ 135 for March; there will be more than one possible outcome for each
Calculate the U.S. dollar profit or loss for the put option @ 135 for March; there will be more than one possible outcome for each option. The purchaser needs to hedge for 1,057,500 pounds.Recall that with an option, the option does not have to be exercised; the holder may choose to trade in the future spot market. The holders choice depends on the future spot rate.
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