From the Perspective of the Writer of a Put Option

question 35

Multiple Choice

From the perspective of the writer of a put option written on €62,500.If the strike price is $1.55/€,and the option premium is $1,875,at what exchange rate do you start to lose money?

• A)$1.52/€
• B)$1.55/€
• C)$1.58/€
• D)none of the options

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Definitions:

Repayment Plan

A structured schedule agreed upon for paying back borrowed money.

Security Interest

An official right or charge on property pledged as security, often for the purpose of loan repayment assurance.

Retail Installment

A payment plan that allows consumers to pay for goods or services over time, typically with interest, in retail transactions.

Financing Statement

A document filed to give public notice of a secured party’s interest in the debtor’s personal property, usually in connection with a secured transaction.