Suppose that AppXs stock price at the exercise date is $160, and the exercise price of the

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Suppose that AppX’s stock price at the exercise date is $160, and the exercise price of the call is $150.

What is the payoff on one option contract? After a 2-for-1 split, the stock price is $80, the exercise price is $75, and the option holder now can purchase 200 shares. Show that the split leaves the option investor’s payoff unaffected.

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ISBN: 9781260571158

12th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Mar 13, 2024 05:00 AM

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Suppose that AppXs stock price at the exercise date is $160, and the exercise price of the

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