Can you please solve this currency option in excel? Solution $3-$AUD$/$EUR Knock$-$In Forward$-$Buy an AUD Put$/$EUR Call and Sell an AUD Call$/$EUR Put with

Up$-$and$-$In Trigger$-$Zero Premium

Expiry Date: $,2015-01-14($four months$)$

Value Date: $,2015-01-16$

B Put Strike: $,0\mathrm{.}6890(20$ pips below the FEC$)$

S Call Strike: $,0\mathrm{.}6890$ with up$-$and$-$in knock$-$in trigger at $0\mathrm{.}7140$

With this structure, your worst$-$case rate is $0\mathrm{.}6890(20$ pips below the FEC$).$ When the option starts, you only have

a bought AUD put option with a strike of $0\mathrm{.}6890.$ However, if $0\mathrm{.}7140$ trades at any time between the option start and

expiry date, then you are "knocked in$"$ to a sold AUD call option with a strike of $0\mathrm{.}6890.$ Having a bought AUD put

and sold AUD call option with the same strike creates a synthetic forward. So$,$ in layman's terms, this structure gives

you a worst$-$case rate that is $20$ pips worse than the FEC; however, you have the opportunity to participate in the

AUD$/$EUR all the way to the trigger rate of $0\mathrm{.}7140.$ If $0\mathrm{.}7140$ does trade during the life of the option, then you have

to deal at the common strike rate of $0\mathrm{.}6890.$