Use the binomial option pricing model to find the value of a call option on 10,000 with a strike price of 12,500. The current exchange rate is 1.50/1.00 and in the next period the exchange rate can increase to 2.40/ or decrease to 0.9375/1.00 (i.e.u= 1.6 andd= 1/u= 0.625). The current interest rates arei= 3%and arei= 4%.Choose the answer closest to yours.

A) 3,275

B) 2,500

C) 3,373

D) 3,243