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Describe the payoffs at expiration of a call option on 10,000 with an exercise price of 1.3 ($/). Assume the current exchange rate is 1.3
Describe the payoffs at expiration of a call option on 10,000 with an exercise price of 1.3 ($/). Assume the current exchange rate is 1.3 ($/). Fill in the following table: Payoff of Option ($) Exchange rate at maturity (ST, $/) 1.15 1.2 1.25 E=1.3 1.35 1.4 1.45 Describe the payoffs at expiration of a Put seller on 10,000 with an exercise price of 1.3 ($/). Assume the current exchange rate is 1.3 ($/). Fill in the following table: Exchange rate at maturity (ST, $/) Payoff of Option ($) 1.15 1.2 1.25 E=1.3 1.35 1.4 1.45
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