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1. Currency put option premiums. List the factors that affect currency put options and briefly explain the relationship that exists for each.

2. Speculating with currency call options. Randy Rudecki purchased a call option on British pounds for 0.02 euros per unit. The strike price was 1.45 euros, and the spot rate at the time the option was exercised was 1.46 euros. Assume there are 31 250 units in a British pound option. What was Randy's net profit on this option?

Financial Management, Finance

  • Category:- Financial Management
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