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You own an AUD call with exercise price of 0.90 USD per AUD and a...

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Question

Finance

You own an AUD call with exercise price of 0.90 USD per AUD and a notional value of AUD 10,000. The spot exchange rate is 1.05 USD per AUD.

Group of answer choices

The intrinsic value of the call is negative.

The intrinsic value of the call is 0.

The intrinsic value of the call is USD 1,500.

The intrinsic value of the call is AUD 1,500.

None of the above; you need an options pricing formula to calculate the exact intrinsic value of the call.

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