1. The current spot exchange rate is $125/ e1.00, the three-month US dollar interest rate is 2%. Consider a three-month American call option on 10,000 with a strike price of $1.22/1.00. What is the least that this option should sell for? Show all your work. (10 Points) 2. For European currency options written on euro with a strike price in dollars ($/e), what of the impact of an increase in the volatility of the exchange rate (S/e) on the option premium? (10 Points)