Question
Suppose a currency call option has an exercise price of A$ x where x is a positive number and a premium of A$ p where
Suppose a currency call option has an exercise price of A$x where x is a positive number and a premium of A$p where p is a positive number.
a. Calculate the break-even price in terms of p and x.
b. What is the maximum loss for the option buyer?
c. Explain why the maximum loss for the option writer is unlimited.
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Restructuring And Innovation In Banking
Authors: Claudio Scardovi
1st Edition
331940203X, 978-3319402031
