n NISM Certifications
NSM General NISM
Medium

An exporter hedges 20,000 USD by buying September 2020 USDINR Put option at strike Rs 73.00 when premium was Rs 0.47/0.49. On 20th Sept, he cancels the option when premium is Rs 0.22/0.24. Latest RBI USDINR reference rate was Rs 72.50. What loss did he incur on cancelling?

Practice question from NISM Series I - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Loss of Rs 5,000

  2. B

    Loss of Rs 5,200

  3. Loss of Rs 5,400

    Correct answer

  4. D

    Loss of Rs 5,600

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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