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Q5: The spot EUR CAD exchange rate is 1.48. The Canadian interest rate is 1.00%. The 11 month forward exchange rate is 1.47821. 2 a)

Q5: The spot EUR CAD exchange rate is 1.48. The Canadian interest rate is 1.00%. The 11 month forward exchange rate is 1.47821. 2 a) Find the European interest rate. b) The price of a 11 month European style put option struck at 1.48 is 0.01700. Find the price of a European call option with the same strike price and expiry. (You need to keep at least 5 decimal places at all times in your answer.)

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