Suppose the current exchange rate is $1.80/, the interest rate in the United States is...
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Suppose the current exchange rate is $1.80/, the interest rate in the United States is 5.25%, the interest rate in the United Kingdom is 4.00%, and the volatility of the $/ exchange rate is 10.0%. Use the Black-Scholes formula to determine the price of a six-month European call option on the British pound with a strike price of $1.80/.
The corresponding forward exchange rate is $____/. (Round to four decimal places.)
Using the Black-Scholes formula d1 is ______, while N1 is ______. (Round to four decimal places.)
Using the Black-Scholes formula d2 is _______, while N2 is _______. (Round to four decimal places.)
The price of the call is $______/. (Round to four decimal places.)
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