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ADM Machinery Corp's stock has a current price of $85. The company's dividend payments have been irregular. As it stands now, it will pay a
ADM Machinery Corp's stock has a current price of $85. The company's dividend payments have been irregular. As it stands now, it will pay a dividend of $1.25 in seven months and another of $1.85 in 14 months. All future dividends beyond these two are uncertain. The current risk-free rate is 3% (continuous compounding). 1) If an American call option with an exercise price of $82 and a time to maturity of 16 months is written on ADM Machinery's stock, then [Select ] 2) If an American call option with an exercise price of $70 and a time to maturity of 18 months is written on ADM Machinery's stock, then [Select ] 3) Two European put options with the same exercise price of $82 and time to maturity of 14 months and 16 months respectively are currently trading at $9.0299 and $10.2498. The best estimate of the value of the American call option with an exercise price of $82 and a maturity of 16 months is [Select ] ADM Machinery Corp's stock has a current price of $85. The company's dividend payments have been irregular. As it stands now, it will pay a dividend of $1.25 in seven months and another of $1.85 in 14 months. All future dividends beyond these two are uncertain. The current risk-free rate is 3% (continuous compounding). 1) If an American call option with an exercise price of $82 and a time to maturity of 16 months is written on ADM Machinery's stock, then [Select ] 2) If an American call option with an exercise price of $70 and a time to maturity of 18 months is written on ADM Machinery's stock, then [Select ] 3) Two European put options with the same exercise price of $82 and time to maturity of 14 months and 16 months respectively are currently trading at $9.0299 and $10.2498. The best estimate of the value of the American call option with an exercise price of $82 and a maturity of 16 months is [Select ]
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