Todayâs spot exchange rate is â¬1=$1.2563. Consider the following put option on euro, â126 December Euroâ which is selling at 0.73Â¢ per â¬. For a trader who has a long position on the put option, answer the following questions.
(1) Determine the payoff and profit/loss if today is the expiration date.
(2)Calculate Intrinsic Value and Time Value of option
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