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7)A Euro-Based (EUR) investor wants to buy a call on the U.S dollar. The current exchange rate is .95 USD/EUR. The one-year risk free rate

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7)A Euro-Based (EUR) investor wants to buy a call on the U.S dollar. The current exchange rate is .95 USD/EUR. The one-year risk free rate in the Euro area is 5% per annum with continuous compounding and in the United Sates is 6.5% per annum with continuous compounding. Assume a volatility of 18% on the exchange rate. What is the price of a one year European Style call option on the U.S Dollar with a strike of 1.00 Eur/USD

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