Question: A put option allows the holder to sell NOK250 000 at an exercise exchange rate of 0.190 (AUD/NOK). If the premium paid is 0.4 Australian

A put option allows the holder to sell NOK250 000 at an exercise exchange rate of 0.190

(AUD/NOK). If the premium paid is 0.4 Australian cents per NOK, calculate the net payoff

at the following spot exchange rates:

i. 0.200 AUD/NOK (3)

ii. 0.192 AUD/NOK (1)

iii. 0.180 AUD/NOK (3)

iv. At what exchange rate will the holder break even

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