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Assume that the dollar-euro spot rate is $1.28 and the six-month forward rate is, FT = Ste(r$-r€)^T= $1.28e0.01x0.5 = $1.2864. The six-month U.S. dollar rate is 5 percent and the Eurodollar rate is 4 percent. The minimum price that a six-month American call option with a striking price of $1.25 should sell for in a rational market is
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