Understanding Options, Exchange Rates, and International Business
Classified in Economy
Written at on 
English with a size of 1.42 KB.
Relationship
Call Option Put Option
Strike < Current
In the Money Out of Money
Exchange Rate
Strike = Current
At the Money
Strike > Current
Out of Money In the Money
Licensing = Technology
Franchising = Specialized Sale or Service Strategy
Future C = Sold on Exchange
Use for Hedging & Speculating
Forward C = Sold over Counter Market
Used for Hedging – Doesn't Exist in Some Currencies
Eurobonds = Usually Issued in Bearer Form
Bought Right to Buy = Call Buyer
Bought Right to Sell = Put Buyer
Obligated to Buy = Put Writer
Obligated to Sell = Call Writer
Relative Interest Rates
Affect Exchange Rate
Capital Flows; Larger, Large Institutional Investor
Interest Rate Risk
Not Mentioned in Text International Business
(Bid/Ask)/Bid 3 to 7% Transaction Cost of Foreign Exchange
ADR MULTIPLICA
VALUE OF EURO $1.3´(1-.05) = $1.235