Question: Question 10 5 points The British pound () is currently worth 1.39 euros (). This can either increase by u = 1.3 or decrease by

Question 10 5 points The British pound () is currently worth

Question 10 5 points The British pound () is currently worth 1.39 euros (). This can either increase by u = 1.3 or decrease by d = 0.85 over each 3 months. Consider a European call option with a strike price of K = 1 per and time-to-maturity T = 6 months. The continuously compounded risk-free rate in Britain is 7% per annum and in Europe is 5% per annum. What is the price of the European call option today? Please add your answer here: Number Question 10 5 points The British pound () is currently worth 1.39 euros (). This can either increase by u = 1.3 or decrease by d = 0.85 over each 3 months. Consider a European call option with a strike price of K = 1 per and time-to-maturity T = 6 months. The continuously compounded risk-free rate in Britain is 7% per annum and in Europe is 5% per annum. What is the price of the European call option today? Please add your answer here: Number

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