A currency is currently worth $0.80 and has a volatility of
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A currency is currently worth $0.80 and has a volatility of 12%. The domestic and foreign risk-free interest rates are 6
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A currency is currently worth $0.80 and has a volatility of 12%. The domestic and foreign risk-free interest rates are 6% and 8%, respectively. Use a two-step binomial tree to value (a) a European four-month call option with a strike price of 0.79 and (b) an American four-month call option with the same strike price.
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