The parameters given for the pricing are: $S_0 = 1.15$ $K = 1.1$ $T = \frac{3}{12} = 0.25$ $\sigma = 0.25$ $r = 0.02$ (domestic risk-free rate, USD) $r_f = 0.005$ (foreign risk-free rate, EUR)

First, we calculate the up ($u$) and down ($d$) factors for the one-step binomial model: $u = e^{\sigma \sqrt{T}} = e^{0.25 \times \sqrt{0.25}} = e^{0.125} \approx 1.13315$ $d = e^{-\sigma \sqrt{T}} = e^{-0.125} \approx 0.88250$

Next, find the option's payoffs at the up and down nodes: $S_u = S_0 \times u = 1.15 \times 1.13315 = 1.30312$ $C_u = \max(S_u - K, 0) = \max(1.30312 - 1.1, 0) = 0.20312$ $S_d = S_0 \times d = 1.15 \times 0.88250 = 1.01487$ $C_d = \max(S_d - K, 0) = 0$

Now compute the risk-neutral probability of an up move ($p$): $a = e^{(r - r_f)T} = e^{(0.02 - 0.005) \times 0.25} = e^{0.00375} \approx 1.00376$ $p = \frac{a - d}{u - d} = \frac{1.00376 - 0.88250}{1.13315 - 0.88250} = \frac{0.12126}{0.25065} \approx 0.48378$

Finally, calculate the current price of the call option by discounting the expected payoff: $C = e^{-rT} [p \times C_u + (1 - p) \times C_d]$ $C = e^{-0.02 \times 0.25} [0.48378 \times 0.20312 + (1 - 0.48378) \times 0]$ $C = e^{-0.005} \times 0.098265 \approx 0.99501 \times 0.098265 \approx 0.097775 \text{ USD}$

Rounding to 4 decimal places gives USD 0.0978.