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1) Yesterday you sold a put option on British pounds. Today's $ spot exchange rate...

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1) Yesterday you sold a put option on British pounds. Today's $ spot exchange rate is higher than your option's strike price. In this situation the put is a) in-the-money b) at-the-money c) out-of-the-money d) none of the above 2) The seller of a put option a) has a maximum loss equal to the strike price minus the premium received. b) has a maximum loss equal to the strike price plus the premium received. c) has a maximum gain equal to the strike price minus the premium received. d) has a maximum gain equal to the strike price plus the premium received. 3) You paid $0.1 for a one-year European call option for l with the strike price of X=1.4 $/. At which exchange rates on the maturity date will you exercise your option? a) Lower than 1.4 $/ b) Higher than 1.4 $/ c) Lower than 1.5 $/ d) Higher than 1.5 $/ 4) You sold a one-year European put option for l with a strike price of 1.6 $ for $0.05. What should the exchange rate on the maturity date be in order for you to make a profit? a) Lower than 1.6 $ b) Higher than 1.6 $/ c) Lower than 1.55 $/ d) Higher than 1.55 $/

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