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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Question
Red Corporation has a 90-day call option for $100,000 at a strike price of P52.25. As of today, the selling spot rate is P52.30/dollar while the buying spot rate is P52.13/dollar. What| is the current position of Red Corporation with regard to its call option?
a.) in-the-money by 12,000
b.) in-the-money by 5,000
c.) out-the-money by12,000
d.) out-the-money by 5,000
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