Suppose It Is January 1990 and the Current Spot Rate

question 4

Multiple Choice

Suppose it is January 1990 and the current spot rate for the DM is $0.592The call premium on a call option with an exercise price of $0.5675 is $0.037What is the intrinsic value of one DM 62,500 call option?

• A) $2,331.25
• B) $1,562.50
• C) $950.00
• D) $768.75

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