An American call option on a stock has a time to maturity of 4 months and an exercise price of $60. The stock price is $

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An American call option on a stock has a time to maturity of 4 months and an exercise price of $60. The stock price is $

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An American Call Option On A Stock Has A Time To Maturity Of 4 Months And An Exercise Price Of 60 The Stock Price Is 1
An American Call Option On A Stock Has A Time To Maturity Of 4 Months And An Exercise Price Of 60 The Stock Price Is 1 (51.19 KiB) Viewed 42 times
An American call option on a stock has a time to maturity of 4 months and an exercise price of $60. The stock price is $60, and the stock volatility is 20%. A dividend of $0.75 per share is expected to be paid in 2 months, which may be considered as an ex-dividend date as well. The continuously compounded risk free rate of interest is 4% per annum. Which of the following statements is true? O a. It is optimal to exercise the option early before the ex-dividend date b. It is not optimal to exercise the option early before the ex-dividend date c. It is optimal to exercise the option early after the ex-dividend date
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