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Consider two European call options on the same underlying stock. Both options have the same exercise price, X = 5 0 $ . The only
Consider two European call options on the same underlying stock. Both options have the same exercise price, X$ The only difference between these options is their maturity. The first has a maturity T year whereas the second has a longer maturity T years. Can we establish which of the two options has highest value today? Explain your answer in words.
Consider two European call options on the same underlying stock. Both options have the same exercise price, X$ The only difference between these options is their maturity. The first has a maturity T year whereas the second has a longer maturity T years.
Can we establish which of the two options has highest value today? Explain your answer in words.
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