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The continuously compounded expected return on Stock X is 10%. The continuously compounded risk-free rate of return is 5%. The volatility of a European call
The continuously compounded expected return on Stock X is 10%. The continuously compounded risk-free rate of return is 5%. The volatility of a European call option on Stock X is 89%. The elasticity of the option is 3.57. Calculate the Sharpe ratio of the call option. A) 5% B) 10% ) C) 13% D) 15% E) 20%
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