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Consider the graph of a call option shown at right. The option is a three-month American call option on 62,500 with a strike price of

Consider the graph of a call option shown at right. The option is a three-month American call option on 62,500 with a strike price of $1.20 = 1.00 and an option premium of $3,125. What are the values of A, B, and C, respectively?

  1. A = $3,125 (or $.05 depending on your scale); B = $1.20; C = $1.25
  2. A = 3,750 (or .06 depending on your scale); B = $1.20; C = $1.25
  3. A = $.05; B = $1.25; C = $1.30
  4. none of the above
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