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Maximum Or Minimum The premium on a put option is primarily a...

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Finance

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Maximum Or Minimum
The premium on a put option is primarily a function of the difference in spot price relative to the strike price X, the time until maturity T, and the volatility of the currency a. P = fis-X, T. 6) For each characteristic of a put option, use the table to indicate whether that would lead to a higher put option premium or a lower put option premium (all else equal). Characteristic Higher Put Option Premium Lower Put Option Premium A higher spot price relative to the strike price A shorter time before expiration O O A higher level of volatility for the currency amount of dollars it will When using a put option to hedge receivables in an international currency, a U.S. based MNC can lock in the receive

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