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Homework answers / question archive / 1) I buy a call option on $ with a strike price of Rp12,000/$ for three months, and pay a premium of Rp200
1) I buy a call option on $ with a strike price of Rp12,000/$ for three months, and pay a premium of Rp200. Draw a pay-off diagram for me (call buyer) and for the seller of the option.
2. If the exchange rate becomes Rp10,000/$, should I exercise my right? Explain briefly. How much the loss or gain?
3. Suppose an Indonesian importer has to pay $1million. How he can hedge using the option?
4. Should he buy or sell a call or put option on $? Draw the diagram describing the situation.
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