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Suppose an American call option's price is $5, the maturity is 3 months, the underlying stock price is $100 and the exercise price is $98.

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Suppose an American call option's price is $5, the maturity is 3 months, the underlying stock price is $100 and the exercise price is $98. Which of the following is most likely to be true? A. The call option price decreases if the maturity increases to 6 months. B. The intrinsic value of the call option is independent of stock price volatility. C. The time value of the call option drops if the exercise price increases. D. None of the above. You purchase one call and sell a put option on Amazon stock ($2,000) with the same exercise price and maturity. The call premium is $20 and the put premium is $40. What is your highest potential gain from this position? A. $20 B. $60 C. $1980 D. Unlimited

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