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24 May, 15:41

The current spot exchange rate is $1.55 = €1.00 and the three-month forward rate is $1.60 = €1.00. consider a three-month american call option on €62,500. for this option to be considered at-the-money, the strike price must be

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  1. 24 May, 17:58
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    The strike price must be $1.55 = €1.00

    Explanation:

    Dollar is the name of the currency used in America. Euro is the name of the currency used in European countries.

    Strike price is a fixed price at which the product is purchased or sold.

    Given:

    The exchange rate of currency = $1.55 = €1.00

    Three-month forward rate = $1.60 = €1.00

    The strike price must be $1.55 = €1.00
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