Consider an American call option on a stock. The stock price is $50, the time to maturity
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Consider an American call option on a stock. The stock price is $50, the time to maturity 15 months, the risk-free rate of interest is 8% per annum, the exercise price is $55, and the volatility in 25% Dividends of $1.50 are expected in 4 months and 10 months Show that it can never be optimal to exercise the option on either of the two dividend dat Calculate the price of the option
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