Stock XYZ is trading at a price of $105. The American-style call option on XYZ with maturity
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Stock XYZ is trading at a price of $105. The American-style call option on XYZ with maturity one year and strike 100 is traded in the market. The term structure of interest rates is flat at 1% and there is a dividend payment in six months of $8. What is the maximum insurance value for the call at which it still makes sense to exercise it?
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If we exercise the call now we collect 5 The call is better off exercised wh...View the full answer
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