For the following problem(s), please include a copy of the cumulative standard normal tables.
-Suppose the current exchange rate is $1.42/€,the interest rate in the United States is 4.0%,the interest rate in the EU is 6%,and the volatility of the $/€ exchange rate is 20%.Using the Black-Scholes formula,the price of a three-month European call option on the Euro with a strike price of $1.45/€ will be closest to:
A)$0.040/€.
B)$0.059/€.
C)$0.078/€.
D)$0.097/€.

Question

Quizplus · Accepted Answer

11eca9b0_d3a5_cf83_b39d_a362b14a882b_TB7031_11
11eca9b0_e551_bc84_b39d_419527e42e3b_TB7031_11
where N(-0.21) = 1 - N(.21) = 1 - .5832 = 0.4168 and N(-0.31) = 1 - N(0.31) = .3783 from the cumulative
standard normal tables.

For the Following Problem(s), Please Include a Copy of the Cumulative