European style call option is trading

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Reference no: EM132016603

On September 18, 2016, a 130 June £ European style call option is trading on PHLX at a premium of 3 cents per pound. The contract size is £31,250. The call holder _____________ the call if the spot rate turns out to be $1.35/£ on the expiration date in June. The call holder _____________ the call if the spot rate turns out to be $1.28/£ on the expiration date in June.

A) will exercise; will not exercise

B) will exercise; will exercise

C) will not exercise; will not exercise

D) will not exercise; will exercise

Reference no: EM132016603

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