Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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The spot price of the Mexican peso is $0.075 per MXN. The U.S. risk-free rate is 1.25% and the Mexican risk-free rate is 4.5%. The exchange rate volatility is 13%.

  1. What is the value of one-year European call with a strike price of $0.0800?
  2. What is the value of one-year European put with a strike price of $0.0800?
  3. Verify that put-call parity holds.
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