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Helen [10]
3 years ago
13

Suppose that instead of using a forward contract, you consider using options. A one-year call option to buy euros at a strike pr

ice of $1.25/€ is trading for $0.10/€. Similarly a one year put option to sell euros at a strike price of $1.25/€ is trading for $0.10/€. To hedge the risk of your profits, should you buy or sell the call or the put?
Business
1 answer:
Stells [14]3 years ago
5 0

Answer:

Sell the put option. The put option is better and advantageous .

Explanation:

The call option is trading far below the strike price and poses risk. The price may not go up to $1.25 and hence not advisable. The put option is better as we stand to make a profit margin ($1.15 / Euro) if it sells the put at he strike price immediately. Given that the difference is high, it is unlikely that the price will move against us and we shall exercise the option as soon as the margin starts reducing.

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horsena [70]

Answer:

d. Special damages

Explanation:

Special damages -

It refers to as a some particular type of damages that occurs because of the violation of some contract or rule , is referred to as a special damage .

In case the rule is not followed or the contracted is violated , then special damages are applied .

All the covers for the special dam,age is pre- decided and is mentioned in the contract .

Hence , from the given scenario of the question ,

The correct answer is d. special damages .

4 0
3 years ago
Which of the following strategic foreign facilities is set up in a location with an abundance of advanced suppliers, competitors
katen-ka-za [31]

Answer:

b. Server factory

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3 years ago
What does humanidocious mean??
Ilia_Sergeevich [38]
Humanidocious is not an actual word because it is not on dictionaries or word that is being used with the definition it contains as this word is a made up or not a real word because this has been used in means of making a made up or fake word in replacing or trying to define something where in the word does not actually exist.
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3 years ago
What kind of structures must a cell have that would be analogous to a modern business?
Elanso [62]

Answer:

I might be wrong but I beleive the answer is cytoskeleton

6 0
3 years ago
What tips should you remember when creating a successful cover letter? Check all that apply.
Furkat [3]

Answer:

a. Use a traditional letter style

c. Proofread several times.

Explanation:

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