Suppose the current exchange rate is $$1\mathrm{.}75/,$ the interest rate in the United States is $5\mathrm{.}09\%,$ the interest rate in the United Kingdom is $4\mathrm{.}14\%,$ and the volatility of the $$/$ exchange rate is $10\mathrm{.}2\%.$ Use the Black$-$Scholes formula to determine the price of a six$-$month European call option on the British pound with a strike price of $$1\mathrm{.}75/.$Suppose the current exchange rate is $\frac{1\mathrm{.}7504}{},$ the interest rate in the

United States is $5\mathrm{.}12\%,$ the interest rate in the United Kingdom is $3\mathrm{.}81\%,$

and the volatility of the $\frac{\text{\$}}{}$ exchange rate is $10\mathrm{.}3\%.$ Use the Black$-$Scholes

formula to determine the price of a six$-$month European call option on the

British pound with a strike price of $\frac{1\mathrm{.}7504}{}.$

The corresponding forward exchange rate is $$\frac{1\mathrm{.}7614}{}.($Round to four

decimal places.$)$

Using the Black$-$Scholes formula $d_1$ is $0\mathrm{.}1224\text{'},$ while $N_1$ is $0\mathrm{.}5487.$

$($Round to four decimal places.$)$

Using the Black$-$Scholes formula $d_2$ is $0\mathrm{.}0496,$ while $N_2$ is $0\mathrm{.}5198.$

$($Round to four decimal places.$)$

The price of the call is $$\frac{0\mathrm{.}0552}{}.($Round to four decimal places.$)$