A Call Option Exists on British Pounds with an Exercise

question 25

Multiple Choice

A call option exists on British pounds with an exercise price of $1.60, a 90-day expiration date, and a premium of $.03 per unit. A put option exists on British pounds with an exercise price of $1.60, a 90-day expiration date, and a premium of $.02 per unit. You plan to purchase options to cover your future receivables of 700,000 pounds in 90 days. You will exercise the option in 90 days (if at all) . You expect the spot rate of the pound to be $1.57 in 90 days. Determine the amount of dollars to be received, after deducting payment for the option premium.

• A) $1,169,000.
• B) $1,099,000.
• C) $1,106,000.
• D) $1,143,100.
• E) $1,134,000.

Comprehend the role of locus of control and self-esteem in personality.

Acknowledge the relationship between specific personality traits and organizational commitment and financial performance.

Recognize how personality assessments can predict employee behavior and job performance.

Understand how governments can regulate negative externalities through direct controls.

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Federal Reserve Board

The governing body of the Federal Reserve System, the central banking system of the United States, responsible for setting monetary policy, regulating banks, and ensuring the stability of the financial system.

U.S. Government

The federal government of the United States, a republic consisting of three branches: legislative, executive, and judicial, established by the Constitution to govern the country.

Unemployment

The condition of being jobless and actively looking for work, typically measured as a percentage of the labor force.