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show steps! The current spot exchange rate is $1.25=euro1.00 and the three month forward rate is $1.30-euro1.00. consider a three-month American call (put) OPTION on
show steps! The current spot exchange rate is $1.25=euro1.00 and the three month forward rate is $1.30-euro1.00. consider a three-month American call (put) OPTION on euro 62500 with a strike price of $1.20=euro1.00. the premium of this American call (put) option is $5000 ($1875) A- calculate the intrinsic value and time value of the call option (per euro). B- At what exchange rate will you break even if you purchase this call option? C- Calculate the intrinsic value and time value of the put option (per euro)
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