Suppose that the exchange rate is 1 dollar for 120 yen. The dollar interest rate is 5%
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a. What is the price of a European call? An American call?
b. What is the price of a European put? An American put?
c. How do you account for the pattern of early exercise across the two options? Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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