Hi, John. I have a problem about the part b of example 3. It says show what will happen if the spot rate in April is $/£ 1.4100-1.4120. In the video, you first convert the transaction at April spot rate 1.4100 and then claim the difference from the delear to calculate the net payment. I don't know why we should treat the exercising process apart just like the currency features. Since we exercise the option, we already know the payment would be22*31250. Why bother so much ?
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Lecture chap 19 traded options example 3
10y ago#1You can show it how you like. The lecture shows what happens in practice.
ok, i know, thank you, sir.
10y ago#3You are welcome :-)
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