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Find the payoff of an interest rate call option on the annual rate with an exercise rate of 10 percent if the one-period rate at

Find the payoff of an interest rate call option on the annual rate with an exercise rate of 10 percent if the one-period rate at expiration is 11 percent. (No days/360 adjustment is necessary and assume a $1 notional amount.) Select one: 1. 0.12 2. zero 3. 0.01 4. 0.0090 5. none of the above

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