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You want to hedge your exchange rate risk arising from a EUR payable by using a call option on AUD/EUR. Your broker quotes a premium
You want to hedge your exchange rate risk arising from a EUR payable by using a call option on AUD/EUR. Your broker quotes a premium of AUDO.0294 for call options on EUR with a strike price of AUD1.2062/EUR: What is the break-even price for a buyer or a seller of this AUD/EUR call option? a. The break-even price is AUD 1.2356 for the buyer and the seller of the option. b. The break-even price is AUD 1.2356 for the buyer and AUD 1.1768 for the seller of the option. c. The break-even price is AUD 1.1768 for the buyer and the seller of the option. d. The break-even price is AUD 1.2062 for the buyer and AUD 1.2356 for the seller of the option. e. The break-even price is AUD 1.1768 for the buyer and AUD 1.2356 for the seller of the option
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