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1-Consider a call option to buy 100 shares of a company for $330 per share. Suppose the company makes a 6-for-4 stock split. How does
1-Consider a call option to buy 100 shares of a company for $330 per share. Suppose the company makes a 6-for-4 stock split. How does this stock split affect the terms of the option contract?
A-$240; 200 shares
B-$150; 150 shares
C-$200; 200 shares
D-$220; 150 shares
2- The spot price of an investment asset is $45. It provides a fixed dividend yield of 5% with annual compounding. If the risk-free rate is 8% with continuous compounding for all maturities, what is the 2-year forward price?
Use at least 6 decimal places:
A-57.90
B-47.90
C-38.90
D-68.90
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