Consider a European call option for 100 shares of IBM Corporation, whose strike price is $170 per
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Question:
Consider a European call option for 100 shares of IBM Corporation, whose strike price is $170 per share and which matures 18 months from now. What does this option entitle you to do?
- Between now and 18 months from now, you have the right, but not the obligation, to purchase 100 shares of IBM Corporation for $170 per share.
- At the maturity date, which is 18 months from now, you have the right, but not the obligation, to sell 100 shares of IBM Corporation for $170 per share.
- At the maturity date, which is 18 months from now, you have the right, but not the obligation, to purchase 100 shares of IBM Corporation for $170 per share.
- Between now and 18 months from now, you are entitled to make a phone call to the European headquarters of IBM Corporation to inquire about the value of 100 shares of IBM.
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