For a $150/£ Call Option with an Initial Premium of $0

question 66

Multiple Choice

For a $1.50/£ call option with an initial premium of $0.033/£ and a rho value of 0.2, after an increase in the U.S. dollar rate from 8% to 9% - the new ATM option premium would be:

• A) $0.037/£.
• B) $1.55/£.
• C) $0.036/£.
• D) $0.035/£.

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Definitions:

FOB

An acronym for "Free On Board," a term used in shipping agreements to indicate that the seller is responsible for the goods until they are loaded onto a vessel at the specified location.

FAS

Generally refers to Financial Accounting Standards, which are guidelines for how financial reports are to be prepared by companies.

Void Title

Not true title; e.g., the title held by someone who knowingly or unknowingly purchased stolen goods.

Stolen Title

The illegal acquisition and possession of a property title or document, often through fraudulent means.