Question: Use a three-time-step tree to value an American floating lookback call option on a currency when the initial exchange rate is 1.6, the domestic risk-free

Use a three-time-step tree to value an American floating lookback call option on a currency when the initial exchange rate is 1.6, the domestic risk-free rate is 5% per annum, the foreign risk-free interest rate is 8% per annum, the exchange rate volatility is 15%, and the time to maturity is 18 months. Use the approach in Section 27.5.

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