Question
The spot price of the Canadian dollar is US $ 0.91. The risk free rates of interest in Canada and the United States are 3%
The spot price of the Canadian dollar is US $ 0.91. The risk free rates of interest in Canada and the United States are 3% and 1% per annum, respectively. The price of a one year European put option to sell one Canadian dollar for US $ 0.90 is US $ 0.03. Use put-call parity to compute the price of a one year European call option to buy one Canadian dollar for US $ 0.90.
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
