Multiple Choice
Consider the graph of a call option shown at right.The option is a three-month American call option on €62,500 with a strike price of $1.50 = €1.00 and an option premium of $3,125.What are the values of A,B,and C,respectively? 
A) A = -$3,125 (or -$.05 depending on your scale) ; B = $1.50; C = $1.55
B) A = -€3,750 (or -€.06 depending on your scale) ; B = $1.50; C = $1.55
C) A = -$.05; B = $1.55; C = $1.60
D) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q14: Calculate the current €/£ spot exchange rate.
Q28: Draw the tree for a call option
Q36: Find the value of a one-year put
Q46: Find the dollar value today of a
Q50: A put option on $15,000 with a
Q54: Verify that the dollar value of your
Q63: Use the European option pricing formula to
Q67: USING RISK NEUTRAL VALUATION find the value
Q76: Today's settlement price on a Chicago Mercantile
Q93: State the composition of the replicating portfolio;