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# Costco buys a Euro put option (contract size: 125,000) at a premium of \$0.13/. The exercise price is \$1.18/: a. If the spot at expiration is \$1.27/,

Costco buys a Euro put option (contract size: €125,000) at a premium of \$0.13/€. The exercise price is \$1.18/€:

a. If the spot at expiration is \$1.27/€, what is the Costco's profit?

b. If the spot at expiration is \$1.09/€, what is the Costco's profit?

c. If the spot at expiration is \$1.00/€, what is the Costco's profit?

In case of Put option a) Payoff = Max(0,(Exercise Price - Price at Expiration))* Contact Size Payoff =... View the full answer

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