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Let $\{X_t \mid t \ge 0\}$ be the foreign exchange rate rate from $£$ to $\$$. Moreover, let$C(X_0, K, T)$and$P(X_0, K, T)$be the prices of the respective call and put options with strike$K$and maturity$T\$. Then \begin{align*} \frac{1}{X_0}P(X_0,\, K,\, T) = K C\left(\frac{1}{X_0},\, \frac{1}{K},\, T \right). \end{align*} Based on the given condition, ...

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A call lets to purchase one unit of underlying for some strike price x. So a call on GBP in USD lets us buy 1 unit of GBP for price x. However, since this is FX, lets clarify this to be USD x and USD 1 gets us GBP 1/x. A put lets you sell one unit of underlying for some strike price y (= 1/x). So a put on USD in GBP lets us sell 1 unit of USD for price 1/x. ...

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In foreign exchange a contract can equally be seen as a put or a call, depending on the point of view: a call on dollars or a put on sterling. This is not Put-call-parity, which is not needed for this problem, it is just two names for the same thing. All you need to do is to invert the strike and convert the price to the other currency: 0.03 usd is 0.02 gbp. ...

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