Question: The current spot exchange rate is $1.55 = 1.00; the three-month U.S. dollar interest rate is 2 percent. Consider a three-month American call option on

The current spot exchange rate is $1.55 = 1.00; the three-month U.S. dollar interest rate is 2 percent. Consider a three-month American call option on 62,500 with a strike price of $1.50 = 1.00. What is the least that this option should sell for?

A) $0.05 62,500 = $3,125

B) $3,125/1.02 = $3,063.73

C) $0.00

D) none of the options

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