How the Value of a European Put Option for £1

question 25

Multiple Choice

How the value of a European put option for £1 will change if the current exchange rate will instantly increase from $1.4/£ to $1.5/£?

• A) Increase by $0.1.
• B) Increase by an amount that cannot be determined based on the available information.
• C) Decrease by $0.1.
• D) Decrease by an amount that cannot be determined based on the available information.

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Definitions:

Physiological Activation

The bodily responses activated through the nervous system and endocrine systems, often in response to external stimuli or internal mental processes.

Important Goals

Objectives or aims that hold significant value or priority in one's life or endeavor.

Homeostasis

The body's automatic process to maintain a stable internal environment in response to external changes.

Optimal Level

The most favorable or efficient level or state for a certain function or condition to occur.