For the following problem(s), please include a copy of the cumulative standard normal tables.
-Suppose the current exchange rate is $1.62/£,the interest rate in the United States is 5.25%,the interest rate in the United Kingdom is 4%,and the volatility of the $/£ exchange rate is 18%.Using the Black-Scholes formula,the price of a six-month European call option on the British pound with a strike price of $1.60/£ will be closest to:
A)$0.040/£.
B)$0.059/£.
C)$0.078/£.
D)$0.097/£.

Question

Quizplus · Accepted Answer

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whereN(.21)=.5832 and N (.08)=.5319 from the cumulative standard normal tables.

For the Following Problem(s), Please Include a Copy of the Cumulative