The current exchange rate of dollars to euros is, Ask an Expert

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The current exchange rate of dollars to euros is $1.8/€1.1

The risk free rate for dollars is ru 3%.

The risk free rate for euros is re 4%

The dollar denominated price of an option to purchase €22 for $32 in six months is $4.61.

(a) Determine the dollar denominated price of an option to sell $22 using the same strike as above. (Hint: the strike comes from the statement 22 for $32.)

(b) Determine the euro denominated price of an option to sell $33 using the same strike as above.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92751809

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