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One Australian dollar is worth 0.95 U.S. Dollars. This exchange rate has a volatility of 15%. The Australia risk-free rate is 7% and the U.S.
One Australian dollar is worth 0.95 U.S. Dollars. This exchange rate has a volatility of 15%. The Australia risk-free rate is 7% and the U.S. risk-free rate is 5%. Using a 20 step binomial models to value the following options with strike prices 1.00 and three months to expiration. The European call is worth zents, the European put is worth cents, the American call is worth zents, and the American put is worth zents. Note: 1 dollar equals 100 cents
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