I note the decision to excise or note is dependant on the future spot rate while completely ignoring the premium. My question is what if the rate moves either for us or not but the difference arising due to the rate variance is less than the premium amount?
Meaning the premium is big enough to move the final figure from a +ve change to -ve.
But remember that the premium is payable whether or not the option is exercised, so the amount of the premium is not relevant when it comes to deciding whether or not to exercise.
I note the decision to excise or note is dependant on the future spot rate while completely ignoring the premium. My question is what if the rate moves either for us or not but the difference arising due to the rate variance is less than the premium amount?
Meaning the premium is big enough to move the final figure from a +ve change to -ve.
But remember that the premium is payable whether or not the option is exercised, so the amount of the premium is not relevant when it comes to deciding whether or not to exercise.
Thanks alot
You are welcome 馃檪
Thanks for the lecture!
You are welcome 馃檪
Thanks for your helpful lectures
You are welcome – I am pleased that they are helpful 馃檪
How I can get exam kit?
Thank you sir because of you i pass F9 and P4
Thank you for all the helpful and interesting lectures.
It is very good. Thanks
thanks so much for the lectures
very good.
THANK YOU VERY MUCH. THESE 94 LECTURES ARE SO USEFUL. I DINT BUY STUDY TEXT. I’M LEARNING FROM THESE LECTURES AND PRACTICES FROM EXAM KIT
Thank you very much for the lectures