Find the lower bound of a European foreign currency put if the spot rate is $3.50,the domestic interest rate is 8 percent,the foreign interest rate is 7 percent,the option expires in six months,and the exercise price is $3.75.
A)zero
B)$0.250
C)$0.366
D)$0.108
E)none of the above

Question

Quizplus · Accepted Answer

The Answer of Find the lower bound of a European foreign currency put if the spot rate is $3.50,the domestic interest rate is 8 percent,the foreign interest rate is 7 percent,the option expires in six months,and the exercise price is $3.75.
A)zero
B)$0.250
C)$0.366
D)$0.108
E)none of the above

Find the Lower Bound of a European Foreign Currency Put