week 1 written
Recently currency options are the new popular form of hedging. Use the Internet to locate a currency options calculator. Use the information in the chart below and calculate a currency option.
Detail Amount
Domestic Currency USD
Foreign Currency EUR
Option Type Call
Interest Rate 5%
Spot price $1.57 cents
Spot Date 6/12/2012
Principle 200,000
Strike Price Create this price
Expiration Date 7/12/2012
Volatility 2%
Research on the Internet and the Rasmussen research databases and write a 1 to 2 page paper that:
Explains the option you calculated.
Describes how hedging can be of advantage or disadvantage to the option.
Use APA formatting for any citations and reference page.
