What is the intrinsic value of a foreign currency call option? What is the intrinsic value of a foreign currency put option?
What will be an ideal response?
The immediate revenue from exercising an option is called the option's intrinsic value. Let K be the strike price, and let S be the current spot rate, both in domestic currency per unit of foreign currency. Then, the intrinsic value per unit of foreign currency can be represented as
Call option: max[S – K, 0]
Put option: max[K – S, 0]
where max denotes the operation that takes the maximum of the two numbers between square brackets.
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Indicate whether the statement is true or false
Define Marketing Public Relations
What will be an ideal response?
M agreed to buy G's house for $200,000. The closing was to be held on April 5. G did not have all items removed from the home until April 9. M had to spend $500 on hotel expenses because of G's breach
The contract had listed that hotel expenses in the event this occurred would be limited to $400. This agreement of capping the hotel expenses at $400 is an example of: A) consequential damages. B) liquidated damages. C) compensatory damages. D) mitigated damages.