11.26. Assume that the stock in Problem 11.25 is due to go ex-dividend in 1.5 months. The...

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11.26. Assume that the stock in Problem 11.25 is due to go ex-dividend in 1.5 months. The expected dividend is 50 cents.

a. What is the price of the option if it is a European call?

b. What is the price of the option if it is a European put?

c. Use the results in the Appendix to this chapter to determine whether there are any circumstances under which the option is exercised early.

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