Question
IBM sells a call option on euros (contract size is 600,000) at a premium of $0.02 per euro. If the exercise price is $1.44/ and
IBM sells a call option on euros (contract size is 600,000) at a premium of $0.02 per euro. If the exercise price is $1.44/ and the spot price of the euro at date of expiration is $1.45/,
A. Will this option be exercised, that is, is in-the-money or out-of-the-money? Why? (2 points)
B. What is IBMs profit (or loss) on the call option? (3 points)
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Lords Of Finance The Bankers Who Broke The World
Authors: Liaquat Ahamed
1st Edition
0143116800, 978-0143116806
