12.9. A foreign currency is currently worth $1.50. The domestic and foreign risk-free interest rates are 5%

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12.9. A foreign currency is currently worth $1.50. The domestic and foreign risk-free interest rates are 5% and 9%, respectively. Calculate a lower bound for the value of a six-month call option on the currency with a strike price of $1.40 if it is

(a) European and

(b) American.

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