- This topic has 1 reply, 2 voices, and was last updated 5 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
This refers to the specimen answer given on page 14
Why for the cost of the options do they state it in dollars? The question says that the premium is ” cents per CHF1″ and the calculation is derived as : 38 contracts at 125 000 CHF each. Why is the answer in US$?
Exercise price US$1·06/CHF1
Payment = US$5,060,000/1·06 = CHF4,773,585
Buy 4,773,585/125,000 = 38·19 put contracts, say 38 contracts
CHF payment = CHF4,750,000
Premium payable = 38 x 125,000 x 0·0216 = US$102,600
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.