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  3. suppose the exchange rate is $1.03/c$. let r $ = 7

Suppose the exchange rate is $1.03/C$. Let r $ = 7%, r C$ = 3%,...

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Finance

Suppose the exchange rate is $1.03/C$. Let r $ = 7%, r C$ = 3%, u = 1.28, d = 0.83, and T = 1.5. Using a 2-step binomial tree, calculate the value of a $1.10-strike European put option on the Canadian dollar.

Option D is correct, but how? Can you provide solution for Excel? formulas and steps or actual excel work sheet please?
Answers: a.

$0.1049
b.

$0.1229
c.

$0.1302
imaged.

$0.1106
e.

$0.1166

Answer & Explanation Solved by verified expert
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