solution

Assume Henrik buys a call option on euros with a strike price of

?\$1.2500?/â‚¬

3.80Â¢

per euro

?(\$0.0380?/â‚¬?)

and with an expiration date three months from now. The option is for

â‚¬100,000.

Calculate? Henrik’s profit or loss should he exercise before maturity at a time when the euro is traded spot at strike prices beginning at

?\$1.11?/â‚¬?,

rising to

?\$1.29?/â‚¬

in increments of

?\$0.03.

The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.11?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.14?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.17?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.20?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.23?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.26?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)The profit or loss should Henrik exercise before maturity at a time when the euro is traded spot at

?\$1.29?/â‚¬

is

?(Round to the nearest cent and indicate a loss by using a negative? sign.)

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