A Europe an call on euro matures after T = 6 months. The call pays on the

Question:

A Europe an call on euro matures after T = 6 months. The call pays on the maturity 100[S(T) − 1.30] dollars if it ends in-the-money, and zero is otherwise, where 100 is the contract multiplier and $1.30 is the strike price K. Euro’s volatility σ is 12 percent per year. Today’s spot exchange rate S_A is $1.4 per euro (in American terms). The continuously compounded annual risk-free interest rates are r = 5 percent in the United States (domestic) and r_E= 4.5 percent in the Eurozone. Compute the price of the call option using the Merton formula.

Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. 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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...