Question: Problem 6: Intro Two months ago, you bought a call option on Euro with a strike price of $1.08, which expires today. Part 1 Attempt

Problem 6:

Intro Two months ago, you bought a call option on Euro with a strike price of $1.08, which expires today. Part 1 Attempt 1/10 for 10 pts. What is the payoff if the currency rate is $1.27 today? 0.19 Correct Payoff for a long call = Mar (0, ST - X) = Mar(0, 1.27 - 1.08) = 0.19 Part 2 | Attempt 1/10 for 10 pts. What is the payoff if the currency rate is $0.89 today? -0.19 Try again Try again See solution (-1 pts.)

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