For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot exchange rate is $0.1602, the call option holder should __ the call? a. exercise b. not exercise

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A: If forward rate is less than the spot rate, then the home currency is trading at discount.

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Q: For a put option of CN¥ with $0.14 exercise price and $0.0005 premium, the breakeven spot price for…

A: Given: Exercise price =$0.14 Premium = $0.0005

Q: option

A: Introduction: Options can be defined as financial contracts in which the buyer is provided with an…

Q: You buy an American call option priced at $0.025/€ on €225,000 at a strike price of $1.50/€. You…

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Q: d. Forward contracts are not traded in any exchanges across the world.

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A: When the currency in the future time is trading higher than spot rate then currency is trading at…

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Q: optic

A: Put call parity relationships show that how call and put premium are related to each other.

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A: There are two types of option Call option and Put Option

Q: Suppose the exchange rate is $1.01/Fr. Let r $ = 8%, r Fr = 3%, u = 1.4, d = 0.8, and T = 2. Using a…

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Q: BMW (Germany) owes FORD (US) $100 due in 1 year. The current spot is $1.2/€. BMW wants to use…

A: Given: BMW owes = $100 Spot rate = $1.2 /€ Strike price on call = $1.1/€ Strike price on put…

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A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

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Q: Let S = $100, K = $95, r = 8%, T = 1, and o = 0. Let u = 1.3, d = 0.8, and n = 2. Under the Binomial…

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Q: Pls answer and explain in detail Question:Dealer A quotes 3.6800-3.6833 for the SAR/USD exchange…

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