Find the price of the euro denominated six month call, Financial Management

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Find the price of the euro denominated six month call

Let’s assume a dollar denominated, 6 month call option with a strike price of $1.28 on euros is selling at a price of $0.12. The current exchange rate is 1.3 $/euro. Dollar interest rate is 4 percent, while euro interest rate is 3 percent. Find the price of the euro denominated six month call option on dollar with strike price of 0.78125 euro.

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Financial Management: Find the price of the euro denominated six month call

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