Question
It is Sep 1, 2017. The current spot rate is $0.9162=C$1, while the risk free interest rate is 1.2% p.a. in US and 3.8% p.a.
It is Sep 1, 2017. The current spot rate is $0.9162=C$1, while the risk free interest rate is 1.2% p.a. in US and 3.8% p.a. in Canada. You have an call option contract on one C$ with a strike of $0.9214 due on Dec 1, 2017, and the option sells at $0.025. What is the call option price on one USD with every term equivalent?
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Essentials of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
14th edition
324422709, 324422702, 978-0324422702
