Problemthe premium on a call option on the market index, Ask an Expert

Accounting

Problem:

The premium on a call option on the market index with an exercise price of 100 is $1.90 when originally purchased. After 2 months the position is closed and the index spot price is 102.

Requirement:

Question: If interest rates are 0.5% per month, what is the Call Profit or Loss?

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173140

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