Question
Kara has sold a put option on New Zealand dollars with an exercise price of A$0.85 and a premium of for A$0.01 per unit. The
Kara has sold a put option on New Zealand dollars with an exercise price of A$0.85 and a premium of for A$0.01 per unit. The spot rate on the options maturity date is A$0.83. Assume that Kara immediately sold off the New Zealand dollars received when the option was exercised. What is Karas profit or loss per unit (assuming the buyer of the option acts rationally)?
| A. | - A$0.01 | |
| B. | A$0.01 | |
| C. | - A$0.02 | |
| D. | A$0.02 | |
| E. | -A$0.03 |
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Canadian Public Sector Financial Management
Authors: Andrew Graham
3rd Edition
1553395417, 9781553395416
