Compute the fair value of the foreign currency option at December 31, 2018.
A) $6,000.
B) $4,500.
C) $3,000.
D) $7,500.
E) $1,500.

Name: Compute the fair value of the foreign currency option at December 31, 2018. A) $6,000. B) $4,500. C) $3,000. D) $7,500. E) $1,500.
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Question

Quizplus · Accepted Answer

The fair value of the foreign currency option at December 31, 2018 is $6,000. This is because the option is in-the-money, and the difference between the exercise price and the spot rate is $6,000.

Compute the Fair Value of the Foreign Currency Option at December