Amber purchased the August call option on Swiss francs with a strike price of $0.65/SF,paying a premium of $0.26/SF. When the spot rate is $0.85/SF, is Amber's call option at-themoney (ATM), in-the-money (ITM), or out-of-the-money (OTM)? Why?

Given: Strike price of swiss francs is $ 0.65 / SF Premium paid for call option is $0.26/ SF Spot…

Answered: Amber purchased the August call option…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Amber purchased the August call option on Swiss francs with a strike price of $0.65/SF, paying a premium of $0.26/SF. When the spot rate is $0.85/SF, is Amber's call option at-the money (ATM), in-the-money (ITM), or out-of-the-money (OTM)? Why?