Question: The current spot exchange rate is $ 1 . 2 7 = 1 . 0 0 and the three - month forward rate is $

The current spot exchange rate is $1.27=1.00 and the three-month forward rate is $1.25=1.00. Consider a three-month American put option on 250,000 with a strike price of $1.30=1.00. Immediate exercise of this option will generate a payoff of ...
A gain of $7,500
A galn of $2.500
A gain of $3,750
No ghin wail occur
The current spot exchange rate is $ 1 . 2 7 = 1 .

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