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Hi Sir, i am a bit confusing the currency option.
for eg, when we buy the call/put option, can we sell the option later?
i refer to June 2013 Q3 Kenduri (a) part option part, can we have alternative answer?
for let say, we assume the 3 month forward rate as spot rate after 3 months,
then we convert the $2.4m in spot rate, and earn the profit from selling the option?You can sell options late by all means.
However in the exam we ignore the possibility of selling (although it would be a good point to mention as a note) and either exercise them or not.
so can we assume the 3 month forward rate as spot rate after 3 months to calculate the profit on option? in case question didn’t mentioned any spot rate after 3 months?
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