A Call Option on UK Pounds Has a Strike Price

question 25

Multiple Choice

A call option on UK pounds has a strike price of $2.05/£ and a cost of $0.02. What is the break-even price for the option?

• A) $2.03/£
• B) $2.07/£
• C) $2.05/£
• D) The answer depends upon if this is a long or a short call option.

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Definitions:

Estimate

An approximation or educated guess based on partial information or data.

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Information collected for reference or analysis, often numeric, but can be in various forms.

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Observations in a dataset that lie an abnormal distance from other values, often indicating variability or error.

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