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The current spot exchange rate is $1.55 = 1.00 The three-month forward rate is $1.60 = 1.00 The three-month U.S interest rate is 4.835% the
The current spot exchange rate is $1.55 = 1.00 The three-month forward rate is $1.60 = 1.00 The three-month U.S interest rate is 4.835% the three-month European interest rate is 4.983% You are looking at a three-month American call option on 62,500 with a strike price of $1.50 = 1.00 costing $.0369/. How much of a profit will immediate exercise generate?
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