Citigroup sells a call option on euros (contract size is 500,000) at a premium of $0.04 per
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Question:
Citigroup sells a call option on euros (contract size is €500,000) at a premium of $0.04 per euro. If the exercise price is $1.34 and the spot price of the euro at expiration is $1.36, what is Citigroup's profit (loss) on the call option?
Graph the seller's profit or loss for the call option described above. What is the break-even spot exchange rate?
Related Book For
Multinational Business Finance
ISBN: 978-0133879872
14th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
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