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The current spot exchange rate is $1.55 = 1.00 and the three-month forward rate is $1.60 - 1.00. Consider a three-month American call option on

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The current spot exchange rate is $1.55 = 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 O $6.125/11 - 15/3/12 O $3.125 negative profit, so exercise would not occur. $6.125

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