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5.1. The current exchange rate of dollars to euros is $18/11. The risk free rate for dollars is ru = 3%. The risk free rate
5.1. The current exchange rate of dollars to euros is $18/11. The risk free rate for dollars is ru = 3%. The risk free rate for euros is re = 4%. The dollar denominated price of an option to purchase 22 for $32 in six months is $5.09. (a) Determine the euro denominated price of a put option to sell $22 in six months using the given strike. (Hint: the strike comes from the statement 22 for $32.) (b) Determine the euro denominated price of a put option to sell $33 in six months using the given strike. (c) Determine the euro denominated price of a call option to buy $33 in six months using the given strike
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