Question

U.S. Dollar-British Pound. Assuming the same initial values for the U.S. dollar-British pound cross-rate in this table how much more would a call option on pounds be if the maturity was doubled from 9

Answer 1

When the maturity of a call option on pounds is doubled from 9, the value of the call option will increase. The exact amount of increase would depend on various factors such as volatility and interest rates.

Step-by-step explanation:

When the maturity of a call option on pounds is doubled from 9, the value of the call option will increase.

Assuming the same initial values for the U.S. dollar-British pound cross-rate, let's say the call option on pounds in the original scenario has a value of $1,000.

If the maturity is doubled, the call option might now have a value of $2,000 or more, depending on various factors such as volatility and interest rates.