Suppose the Current Spot Rate for the DM Is $0

question 12

Multiple Choice

Suppose the current spot rate for the DM is $0.5925. The call premium on a call option with an exercise price of $0.5675 is $0.0373. What 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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Definitions:

Motorcycle Maker

A company or individual involved in the design, manufacturing, and distribution of motorcycles.

Follow-the-Leader

A strategy or behavior in which individuals or organizations mimic the actions or decisions of those perceived as leaders or successful entities.

Imitator Response

The strategic action taken by a company to mimic or replicate the successful products, services, or operations of competitors.

Uncertain Environment

A situation or condition characterized by unpredictability and a lack of information about future events.