Suppose that you have collected the following market data: Spot rate now: USD 1.38/GBP 3-month...
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Suppose that you have collected the following market data: Spot rate now: USD 1.38/GBP 3-month forward: USD 1.35/GBP Call option: strike price USD 1.4/GBP, premium $0.04/GBP Put option: strike USD 1.4/GBP, premium $0.03/GBP. Plot the pay-off for the [1] Buyer of the forward contract, [2] seller of the call option, [3] buyer of the put option. You are considering buying the put option. What will be your pay-off if the market rate is USD 1.39/GBP
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