4 In relation to the information on traded options in Table 12.1 explain why the following features...

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4 In relation to the information on traded options in Table 12.1 explain why the following features were observed:

(a) the lower the exercise price, the higher the value of a call;

(b) the greater the time to maturity, the higher the price of a call; and

(c) the price paid for calls exceeds the gross profit that could be made by immediately exercising the call.

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