Hello sir with respect to the premium payable for the options part of the question.
As the premium was quoted as € per $. Is this why we used the premium as “0.0290” direct from the question (186*125000*0.0290)?
Normally it is quoted as cents and I divide by 100 in my in my premium calculation.
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Lirio March June 2016
5y ago#1The premiums are more usually quoted in cents per $, but this question specifically says that the premium is in € per $.
When it is quoted in cents then you divide by 100 to get the cost in €'s because there are 100 cents in a €. When it is quoted in €'s there is obviously no need to divide by 100.
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