What is the lower bound of an european foreign currency


Find the price of an European call on futures if the futures price is 106 the exercise price is 100 the continuously compounded risk free rate is 7.2% the volatility is 0.41 and the call expires in six months. please shows all the steps .

A. 14.57

B. 17.04

C. 6.00

D. 19.78

What is the lower bound of an European foreign currency call if the spot rate is 2.25 the domestic interest rate is 5.5% the foreign interest rate is 6.2% the option expire in three months and the exercise price is 2.20?

A. 0.0457

B. 8.9

C. 10.4

D. 6.5

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