At what exchange rate will you break-even

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Question: The current spot exchange rate is $1.25 = €1.00 and the three-month forward rate is $1.30 = €1.00. Consider a three-month European call option on €62,500 with a strike price of $1.20 = €1.00. If you pay an option premium of $5,000 to buy this call, at what exchange rate will you break-even?

Reference no: EM131965060

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