Question
The current price of a stock is $100. The stock pays a dividend of $2 in three months. The risk-free rate of interest for all
The current price of a stock is $100. The stock pays a dividend of $2 in three months. The risk-free rate of interest for all maturities in annualized and continuously-compounded terms is 2%. What is the minimum price of an at-the-money American call option on the stock with six months maturity?
| A. | $0 |
| B. | $2 |
| C. | -$1 |
| D. | $1 |
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Behavioural Approaches To Corporate Governance
Authors: Cameron Elliott Gordon
1st Edition
1138611395, 978-1138611399
