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Dear John,
Is there any difference in the method of solving options if they are not European style but American style for FX? Because I doubt it as the question I am doing says “It can be assumed that settlement for the futures and options contracts is at the end of the month”
In the exam you always treat them effectively as if they were American style and therefore can exercise them at any time. Usually anyway the questions says end of month in which case it would make no difference whether they were American or European style.
(With European you cannot exercise them earlier and so what happens if the transaction is not at the end of the month is that you sell the options at that date (if, obviously, it would give a gain). However, that is not relevant for calculations in the exam.)
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