question archive You bought 105,000
You bought 105,000
Subject:BusinessPrice:2.87 Bought7
You bought 105,000.00 call options with a strike of $1.600000 / A$ for $0.071040. The current spot exchange rate is $1.664000 / A$. Immediate exercise of these options wil generate a profit/loss of?
-739.20
- 14.179 20
-776.16
Negative profit, so exercise would not occur
None of the above
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Answer:
Profit or loss is computed as shown below:
= (current rate - strike price - premium) x 105,000
= ($ 1.664000 - $ 1.600000 - $ 0.071040) x 105,000
= - $ 0.00704 x 105,000
= - $ 739.20
