Consider an American Call option with a Strike of $100 and a term of 6 months at time 0. After 3 months the spot price i

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answerhappygod
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Consider an American Call option with a Strike of $100 and a term of 6 months at time 0. After 3 months the spot price i

Post by answerhappygod »

Consider an American Call option with a Strike of $100 and a
term of 6 months at time 0.
After 3 months the spot price is 105 and a dividend will be paid
amounting to $1.
Early exercise is optimal when the risk free rate is
-
a) 5.5%
b) 5.25%
c) 5%
d) 4%
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