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Assume the Following American Call Option Will fiNish In-The-Money: the Exercise

Question 148

Multiple Choice

Assume the following American call option will finish in-the-money: the exercise price is $75, maturity is one year, current stock price is $72.50, and the risk-free interest rate is 6%. What is the
Value of the call option?


A) -$6.60
B) $0.00
C) $1.75
D) $2.15
E) $2.65

Correct Answer:

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