Corresponding forward exchange rate

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Reference no: EM131567846

Suppose the current exchange rate is $1.78/£?, the interest rate in the United States is 5.09%?, the interest rate in the United Kingdom is 4.14%?, and the volatility of the? $/£ exchange rate is 9.8%. Use the? Black-Scholes formula to determine the price of a? six-month European call option on the British pound with a strike price of $1.78/£.

The corresponding forward exchange rate is ?$____/£. (Round to four decimal places)

Using the? Black-Scholes formula d1 is____ while N1 is ____ (Round to four decimal places)

Using the? Black-Scholes formula d2 is ___ while N2 is ____(Round to four decimal places)

The price of the call is ?$____/£(Round to four decimal places)

Reference no: EM131567846

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