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NUTOURNE CO (DEC 18)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › NUTOURNE CO (DEC 18)

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 30, 2022 at 6:44 am #656821
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    Why they have used put options, if we are receiving foreign currency we will buy home currency that means call options right?

    May 30, 2022 at 8:48 am #656828
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    No.

    The options are quoted in CHF. Nutourne is receiving CHF and needs to sell the CHF to convert to $’s. Therefore they need options to sell CHF i.e. CHF put options.

    May 30, 2022 at 12:38 pm #656836
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    Currency options (contract size CHF125,000, exercise price quotation US$ per CHF1,
    premium: US cents per CHF1)
    Calls Puts
    Exercise price December March June December March June
    1.0375 0.47 0.50 0.53 0.74 0.79 0.86
    Futures and options contracts mature at the month end.

    this means 1 chf = 1.0375 exercise price right?

    May 30, 2022 at 4:41 pm #656879
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Yes – the quotes are in US$ = CHF1

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