Calculate the exchange rate at maturity

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Now assume we are talking about options on the British pound, where the contract is on £125,000. (a) Create a payoff and profit table for a call option on the pound which has a strike price of $1.35, and costs $0.05. Calculate the exchange rate at maturity for which the owner of the call will break even. (b) Create a payoff and profit table for a put option on the pound which has a strike price of $1.55, and costs $0.15. Calculate the exchange rate at maturity for which the owner of the call will break even.

Reference no: EM131555474

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