simple options question please, simple, someone, actually, question

chunty

hey guys, can someone please answer this simple options question

if i have a call option on ONE YEAR LIBOR with a strike of 3%
at expiry LIBOR is 4%
notional principle=$1


do i get $0.01 one year after the option expired

or will i get the PV of the 0.01 at expiry ?

i guess i would be indifferent, but which one actually happens ?

scarecrow

u get the pv of protit discounted at the prevailing rate...

stalkey

Don't you get that $0.01 one year after expiry, but if you want to know the PV of that today then discount it back to today at today's discount rate?