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Suppose you pay 10 to buy a European ( K = 100, t = 2) call option on a given security. Assuming a continuously compounded

Suppose you pay 10 to buy a European (K = 100, t = 2) call option on a given security. Assuming a continuously compounded nominal annual interest rate of 6 percent, find the present value of your return from this investment if the price of the security at time 2 is (a) 110; (b) 98.

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