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An American call option on a stock has a strike price of 8 5 and expires in 5 months. You are given: ( i )
An American call option on a stock has a strike price of and expires in months. You are given:
i The risk free rate is
it A dividend of is payable at the end of today, and another dividend of is payable in months.
iii The current price of the stock is
iv A kuropean put opion with a strike price of whch expires in inonths costs
Could it be rational to exercise the option immediately, before the dividend is paid?
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