A call option contract has a strike rate of $1.820/£ and a premium of $0.08. The spot rate on maturity is $1.920/£. Which one of the following is the gain (or) loss to the buyer of the call option? a. The buyer exercise the option and gain is $0.10/£ b. The buyer not exercise the option and loss is $0.08/£ c. The buyer exercise the option and gain is $0.02/£ d. None of the options
A call option contract has a strike rate of $1.820/£ and a premium of $0.08. The spot rate on maturity is $1.920/£. Which one of the following is the gain (or) loss to the buyer of the call option? a. The buyer exercise the option and gain is $0.10/£ b. The buyer not exercise the option and loss is $0.08/£ c. The buyer exercise the option and gain is $0.02/£ d. None of the options
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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23-A call option contract has a strike rate of $1.820/£ and a premium of $0.08. The spot rate on maturity is $1.920/£. Which one of the following is the gain (or) loss to the buyer of the call option?
a. The buyer exercise the option and gain is $0.10/£
b. The buyer not exercise the option and loss is $0.08/£
c. The buyer exercise the option and gain is $0.02/£
d. None of the options
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