1) Assume the current spot rate is $1.1201/, and U.S. Dollar ($) is the home currency. A...
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Question:
1) Assume the current spot rate is $1.1201/, and U.S. Dollar ($) is the home currency. A PUT option on Euro () has a strike price of $1.0640/ and a premium of $0.00038/. i.Determine break-even price for the option. ii.For a purchaser, when the spot rate is $1.1740/, is the option at-the-money, or in-the-money, or out-of-the-money? iii.Determine net profit for the option if the spot rate is $1.0000/.
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