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Let CA(K) be the NA-price of an American call option at time 0 with strike price K, underlying asset S, and maturity T. Consider two

Let CA(K) be the NA-price of an American call option at time 0 with strike price K, underlying asset S, and maturity T. Consider two strike prices 0 < K < L.

(a) (3pts)Show 0CA(K)CA(L)LK.

(b) (3pts) Can we lower L K using a bank account with continuous interest rate r > 0?

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