Question
For the case of call options, and S0 = 100, r = 0.07, q = 0.05, sigma = 0.3, T = 1, (giving all answers
For the case of call options, and S0 = 100, r = 0.07, q = 0.05, sigma = 0.3, T = 1, (giving all answers to four decimal places)
E. What is the Early exercise premium when K = 100? xxxx
F. What is the Early exercise premium when K = 125? xxxx
G. What is the Early exercise premium when K = 75? xxxx
H. What is the Early exercise premium when K = 60? xxxx
I. In the case that S0 = 100, r = 0.07, q = 0.05, sigma = 0.3, T = 1, and for an American call option with strike K = 60, what is the price in dollars today? xxxx
J. In the case that S0 = 100, r = 0.07, q = 0.05, sigma = 0.3, T = 1, and for an American call option with strike K = 60, at what time would a holder of the option optimally exercise? Fill in your answer in one or two sentences maximum.
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