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Excited to see the new site :D

hmm...

Hi Steve, Can you copy down the first question as well?

I feel the explanation to the answer and the answer itself has some mismatches.

GARP 2007 Practice Exam question and its solution. Something seems fishy about the question 116. You are using the Merton model (Black-Scholes model for options on a stock paying a dividend yield) to price a European option on foreign exchange. The underlying is the AUD/CAD spot exchange rate...

Opportunities multiply as they are seized.

The questions seems quite vague, with lot of ambiguity. It really would help avoid solving such questions as David rightly says counterproductive. And when you multiply the rate by 0.5 for the 6 months it has to be the forward rate between year 1 and year 2.