The current exchange rate is 1.50/1.00 and in the next period the exchange rate can increase to 2.40/1.00 or decrease to 0.9375/1.00 (i.e. u = 1.6 and d = 1/u = 0.625). The current interest rates are i = 3% and are i = 4%. Use risk neutral valuation to find the value of a call option on 10,000 with a strike price of 1.25/1.00.

A.1,897

B.1,954

C.4,310

D.4,185