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You hold n American call option with 30 strike price on an equity that sells at 35. The option sells for 5 one year before
You hold n American call option with 30 strike price on an equity that sells at 35. The option sells for 5 one year before expiration. Compare the cash flows at expiration from:
(1) exercising the option now, and putting the 5 proceeds in a bank account until the expiration date; and
(2) holding on to the option until expiration, selling short the equity, and placing the 35 you receive into the same bank account
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