The current exchange rate between AUD and USD is $0.78 per AUD. The risk free interest rate is 1% for USD and 3% for AUD (per year with continuous compounding). Assume a Black- Scholes-Merton model for the exchange rate. The volatility of the exchange rate is 0.2. (1). What's the risk neutral probability that the exchange rate in 1 year is below $0.76 per AUD? (2). Consider a European style option with maturity 1 year. The option holder receives $1 if the exchange rate at maturity is below $0.76 per AUD. Otherwise, the option expires worthless. Compute the price of this option. The current exchange rate between AUD and USD is $0.78 per AUD. The risk free interest rate is 1% for USD and 3% for AUD (per year with continuous compounding). Assume a Black- Scholes-Merton model for the exchange rate. The volatility of the exchange rate is 0.2. (1). What's the risk neutral probability that the exchange rate in 1 year is below $0.76 per AUD? (2). Consider a European style option with maturity 1 year. The option holder receives $1 if the exchange rate at maturity is below $0.76 per AUD. Otherwise, the option expires worthless. Compute the price of this option