A currency dealer is considering trading between Australian dollar (AUD) and Norwegian Krone (NOK). A put option allows the holder to sell NOK400 000 now at an exercise exchange rate of 0.2540 (AUD/NOK). If the premium paid is 0.7 Australian cents for each NOK, calculate the net payoff at the following spot exchange rates (in AUD/NOK) :

Answer rating: 100% (QA)

To calculate the net payoff at different spot exchange rates AUDNOK we need to consider the exercise ... View the full answer