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This is required data U.S. Dollar/Euro. The table, indicates that a 1-year call option on euros at a strike rate of $1.2503/ will cost the

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image text in transcribed U.S. Dollar/Euro. The table, indicates that a 1-year call option on euros at a strike rate of $1.2503/ will cost the buyer $0.0544/, or 4.30%. But that assumed a volatility of 10.500% when the spot rate was $1.2648/. What would the same call option cost if the volatility was reduced to 10.500% when the spot rate fell to $1.2475/ ? The same call option cost if the volatility was reduced to 10.500% when the spot rate fell to $1.2475/ would be $ l. (Round to four decimal places.) Pricing Currency Options on the Euro A U.S..based firm wishing to buy A European firm wishing to buy

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