Solution-Market price on the expiration date

Market price on the expiration date

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Reference no: EM131158564

You purchase four hundred of a 3-month call option on euro for a premium of $0.05 perunit, with an exercise (strike) price of $1.18; the option will not be exercised until the expiration date,if at all. You borrowed the money for the premium at 5% continuous compounding rate. If the euro's market price on the expiration date (t = 3/12) is $1.21, how much is your net profit/loss per unit indollars and in euros?

Reference no: EM131158564

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Market price on the expiration date : You borrowed the money for the premium at 5% continuous compounding rate. If the euro's market price on the expiration date (t = 3/12) is $1.21, how much is your net profit/loss per unit indollars and in euros?

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Market price on the expiration date

Reference no: EM131158564

Reference no: EM131158564

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