Question
The CFO of Avnet, Inc. has just bought 10 call options on the CAD [CAD = Canadian dollar]. The strike price is USD 0.86/CAD and
The CFO of Avnet, Inc. has just bought 10 call options on the CAD [CAD = Canadian dollar]. The strike price is USD 0.86/CAD and the call price is USD 0.06/CAD. If the spot rate right now is USD 0.80/CAD, the direction the CAD has to go for the call options to breakeven is ___________, and the breakeven price for these options is __________.
Group of answer choices
up / 0.92
down / 0.80
down / 0.92
up / 0.86
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
