What is the payoff on an average-rate pound call option against the dollar?
What will be an ideal response?
The payoff per pound on an average-rate pound call option against the dollar with a strike price of K($/£) is max[0, ($/£) – K($/£)], where ($/£) defines the average dollar-pound exchange rate between the initiation of the contract and the expiration date. To calculate the average exchange rate, the counterparties to the option contract must agree on a source for the data and a way of computing the average. They must decide on a time interval for the observations entering the average, which could be daily, weekly, or monthly, and they must decide whether the average is an arithmetic or geometric average. At the maturity of an average-rate option, the seller of the option settles the contract by delivering the dollar value of the option payoff to the buyer. Because an average of future exchange rates is less volatile than the future spot rate at maturity, average-rate options are less expensive than standard European options.
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Culinary Enterprises manufactures cookware sets and sells the sets to department stores. Culinary expects to sell 2800 cookware sets for $280 each in April and 4000 cookware sets for $295 each in May. Sales are 30% cash and 70% on account. Compute the total budgeted sales for May.
A) $1,180,000 B) $784,000 C) $354,000 D) $826,000
Sony found that Japanese commuters had difficulty using standard laptops on crowded rush-hour trains since standing commuters have no laps. So it created the U as a "standing computer"
The U includes a touch screen and small keyboard that can be used while standing or on the move. This is an example of ________. A) straight product extension B) product invention C) product adaptation D) dual adaptation E) standardization
When making a telephone call, use a three-point ________ by naming the person you are calling, by identifying yourself and your affiliation, and by giving a brief explanation of your reason for calling
Fill in the blank(s) with correct word