U.S. Dollar-Euro. The table, = indicates that a 1-year call option on euros at a strike rate of $1.2505 1.00 will cost the buyer $0.0464 per , or 3.71%. But that assumed a volatility of 10.500% when the spot rate was $1.2493 = 1.00. What would that same call option cost if the volatility was reduced to 10.500% when the spot rate fell to $1.2479 = 1.00? The same call option cost if the volatility was reduced to 10.500% when the spot rate fell to $1.2479 = 1.00 would be $ /. (Round to four decimal places.) Pricing Currency Options on the Euro A U.S.-based firm wishing to buy or sell euros (the foreign currency) Variable Value A European firm wishing to buy or sell dollars (the foreign currency) Variable Value Spot rate (domestic/foreign) Forward rate (domestic/foreign) SO $ 1.2493 SO 0.8004 FO $ 1.2402 FO 0.8063 Strike rate (domestic/foreign) X $ 1.2505 X 0.7997 Domestic interest rate (% p.a.) rd 1.453 % rd 2.186 % Foreign interest rate (% p.a.) rf 2.186 % rf 1.453 % Time (years, 365 days) T 1.000 T 1.000 Days equivalent 365.00 365.00 Volatility (% p.a.) S 10.500 % S 10.500 %