A 1-year call option on the British pound has a strike price of $1.30/pound. The spot interest rate today is $1.25/pound

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answerhappygod
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A 1-year call option on the British pound has a strike price of $1.30/pound. The spot interest rate today is $1.25/pound

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A 1-year call option on the British pound has a strike price of
$1.30/pound. The spot interest rate today is $1.25/pound and the
interest rates in the US and UK are 1% and 2% respectively. If the
pound can only appreciate to $1.50/pound or depreciate to
$1.10/pound in a year, which of the following statements is
correct?
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