Price GE call options with exercise prices of 40 and 45, respectively, given a current stock price

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Price GE call options with exercise prices of 40 and 45, respectively, given a current stock price of $34.67, three months to maturity of the options. And a relevant risk-free rate of 4.80%. If the call premium on the exercise pric of 40 is

$5.80, should you purchase the call option? If the premium on the 45 GE call option is $11.10, should you purchase the option?

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Quantitative Corporate Finance

ISBN: 9781402070198

1st Edition

Authors: John B. Guerard, Jr.; Eli Schwartz

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Question Posted: May 30, 2024 09:03 AM

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Price GE call options with exercise prices of 40 and 45, respectively, given a current stock price

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Quantitative Corporate Finance

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