Question: Consider the pay-later call option. This has payoff (S) = max(S E, 0) at time T. The holder of the option does not pay

Consider the pay-later call option. This has payoff Λ(S) = max(S − E, 0) at time T. The holder of the option does not pay a premium when the contract is set up, but must pay Q to the writer at expiry, only if S ≥ E. What is the value of Q?

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