Find the Value of a European Foreign Currency Call If

question 28

Multiple Choice

Find the value of a European foreign currency call if the spot rate is $5.25,the exercise price is $5.40,the domestic interest rate is 6.1 percent,the foreign interest rate is 5.5 percent,the call expires in one month,and the volatility is 0.32.(The interest rates are continuously compounded. )

• A)$0.167
• B)$0.15
• C)$0.140
• D)$0.131
• E)none of the above

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Accounts Receivable Approach

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Cost Of Switching

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