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The current spot exchange rate is $1.54 = 1.00 and the three-month forward rate is $1.60 = 1.00. Consider a three-month American call option on
The current spot exchange rate is $1.54 = 1.00 and the three-month forward rate is $1.60 = 1.00. Consider a three-month American call option on 62,500 with a strike price of $1.50 = 1.00. Immediate exercise of this option will generate a profit of
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