Question
Mark Smith (sold)wrote a put option on Canadian dollars (CAD) for $0.04 per Canadian dollars. The strike price was $0.75 USD and the spot rate
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Mark Smith (sold)wrote a put option on Canadian dollars (CAD) for $0.04 per Canadian dollars. The strike price was $0.75 USD and the spot rate at the time the option was exercised was $0.73 USD. The option contract was in 100,000 units. What was Marks net profit for this trade?
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Carl sold a call option with an exercise price of $1.51 for a premium of $0.03. If the spot rate at the options maturity turns out to be $1.57, what is Carls profit or loss per unit (assuming the buyer of the option acts rationally)?
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Finance And Economics Discussion Series Overnight Interbank Loan Markets
Authors: United States Federal Reserve Board, Selva Demiralp
1st Edition
1288712618, 9781288712618
