Moving to another question will save this response. Question 11 The following is NOT correct regarding the put option premium The higher the spot rate relative to the strike price, the higher the probability that the option will be exercised The lower the spot rate relative to the strike price, the higher the probability that the option will be exercised The longer the time to expiration, the greater the put option premium The greater the variability, the greater the probability that the option may be exercised Question 12 A MNC purchased a call option on British pounds for $.03 per unit. The strike price was $1.35 and the spot rate at the time the option was exercised was $1.38. the per unit profit or loss to the writer of this option - $.02 $.02 $.03 SO Question 7 A company expects to receive a foreign currency from the sale of merchandise. Because it is nervous about possible exchange rate movements in this currency, it wants to hedge its position with an option in the currency. The appropriate action for them to hedge is to buy a call option True False