A Call Option on Euros Is Written with a Strike

question 67

Multiple Choice

A call option on euros is written with a strike price of $1.30/euro. Which spot price maximizes your profit if you choose to exercise the option before maturity?

• A) $1.20/euro
• B) $1.25/euro
• C) $1.30/euro
• D) $1.35/euro

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Definitions:

Ciliary Body

A structure in the eye that includes the ciliary muscle, which controls the shape of the lens, and the ciliary epithelium, which produces the aqueous humor.

Lysozyme

An enzyme found in saliva, tears, and other secretions, capable of breaking down bacterial cell walls to fight infection.

Bony Labyrinth

A complex system of passages and cavities within the temporal bone of the skull, important for hearing and balance.

Endolymph

A fluid within the membranous labyrinth of the inner ear that plays an essential role in the transduction of sound vibrations to neural signals.