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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?


Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing current assets to current liabilities.

Current Ratio

A liquidity ratio calculated as current assets divided by current liabilities, indicating the ability of a company to pay short-term obligations.

Current Liabilities

Debts or obligations that a company expects to pay off within one fiscal year, including accounts payable, short-term loans, and accrued expenses.

Current Assets

Assets that a company expects to convert into cash, sell, or use up within one year or within its operating cycle if longer than a year.

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