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Please answer all of them with all explanations 1.5. You hold an American call option with a 30 exercise price on a stock with a
Please answer all of them with all explanations
1.5. You hold an American call option with a 30 exercise price on a stock with a current price of 35. The option sells for 5 one year before maturity. Compare the net profit at maturity from two alternative strategies: (a) Exercise the option now and put the proceeds in a bank account until T (maturity date). (b) Hold onto the option until maturity, short sell the underlying stock now, and place the proceeds you receive in a bank account until TStep by Step Solution
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