Question: The current USD vs. INR spot rate is S(INR/USD) = 7.50. In one month, the spot rate can take one of two values: 7.20 and

The current USD vs. INR spot rate is S(INR/USD) = 7.50. In one month, the spot rate can take one of two values: 7.20 and 7.80. One month interest rates are 0.5%pa in the United States and 4.8%pa in India. To the nearest hundred INR, what is the no-arbitrage INR price of a one month put on USD 100,000 vs. the INR with strike price equal to current spot price, ignoring any possible transaction costs?

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