Reading EOC Q7

CFA Level III Derivatives
#1

Can someone tell me why the option cost is 200k instead of 300k?

I get 15mil/1.5X0.03 = 300k

#2

200000 Euro,

300000 USD

#3

Isn’t it like,

15mil(USD) / 1.5 = 10 mil Euro

10 mil Euro X 0.03 = 300k Euro ?

How did you get 200k Euro?

This is Reading 40 by the way guys…

#4

it is reading 35…lol

#5

300k /Euro divided by 1.5/Euro = 200k Euro

#6

the unit in the chart is

“all prices in $ per pound”

sorry, it is pound, not euro. but same calculation

#7

Oh… Thanks!!!

I did recognize “all prices in $ per pound”