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Chemistry, 11.07.2019 15:30 amandaelisantos

One year ago, you sold a put option on 100,000 euros with an expiration date of 1 year. you received a premium on the put option of $0.04 per unit. the exercise price was $1.22. assume that 1 year ago the spot rate of the euro was $1.20, the 1-year forward rate exhibited a discount of 2 percent, and the 1-year futures price was the same as the 1-year forward rate. from 1 year ago to today, the euro depreciated against the dollar by 4 percent. today the put option will be exercised (if it is feasible for the buyer to do so).

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