1) Yesterday you sold a put option on British pounds. Today's $ spot exchange rate...
90.2K
Verified Solution
Link Copied!
Question
Finance
1) Yesterday you sold a put option on British pounds. Today's $ spot exchange rate is higher than your option's strike price. In this situation the put is a) in-the-money b) at-the-money c) out-of-the-money d) none of the above 2) The seller of a put option a) has a maximum loss equal to the strike price minus the premium received. b) has a maximum loss equal to the strike price plus the premium received. c) has a maximum gain equal to the strike price minus the premium received. d) has a maximum gain equal to the strike price plus the premium received. 3) You paid $0.1 for a one-year European call option for l with the strike price of X=1.4 $/. At which exchange rates on the maturity date will you exercise your option? a) Lower than 1.4 $/ b) Higher than 1.4 $/ c) Lower than 1.5 $/ d) Higher than 1.5 $/ 4) You sold a one-year European put option for l with a strike price of 1.6 $ for $0.05. What should the exchange rate on the maturity date be in order for you to make a profit? a) Lower than 1.6 $ b) Higher than 1.6 $/ c) Lower than 1.55 $/ d) Higher than 1.55 $/
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
