The exchange rate is 15 usdbritish pound us domestic, Ask an Expert

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The exchange rate is $1.5 USD/British pound. US domestic interest is 6% continuous compounding. Foreign interest is 3% continuous compoudnding. A 6 month dollar denominated European put on pounds with K=$1.5 costs $0.03.

a) Find the premium in Pounds of a 6 month pound denominated European call option in dollars with K=$0.67 pounds.

b) Find the premium in Pounds of a 6 month pound denominated European put on dollars with K=$0.67 pounds

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92304207

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