Assume a call option on euros is written with a strike


Assume a call option on euros is written with a strike price of $1.2500/€ at a premium of 3.80¢ per euro ($0.0380/€) and with an expiration date three months from now. The option is for €100,000. Calculate your profit or loss (in each of the following scenarios) when the euro is traded at the following spot rates: (1) $1.12/€ (2) $1.24/€ (3) $1.32/€? (4) $1.36/€

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Financial Management: Assume a call option on euros is written with a strike
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