Your firm has a British customer that is willing to place a $1 million order (with payment due in 6 months),but insists upon paying in pounds instead of dollars.
A)The customer essentially wants you to discount your price by the value of a put option on pounds.
B)The customer essentially wants you to discount your price by the value of a call option on pounds.
C)The customer essentially wants you to discount your price by the sum of the values of a call and put option on pounds.
D)none of the options

Question

Quizplus · Accepted Answer

The customer is not asking for a discount related to options; they are simply requesting to pay in their local currency, pounds, instead of dollars.

Your Firm Has a British Customer That Is Willing to Place