What is an option? How is an options minimum (or intrinsic value) determined? How does arbitrage ensure
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What is an option? How is an option’s minimum (or intrinsic value) determined? How does arbitrage ensure that the price of an option will not be less than the option’s intrinsic value? If you saw that the price of a share of stock was $20, the exercise price of an option to buy the stock was $10, and the price of the option was $5, what would you do?
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