One year ago, your firm purchased an option that gives you the right to buy 10 tons
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Question:
- One year ago, your firm purchased an option that gives you the right to buy 10 tons of steel for $450,000 today. The current price of steel is $23 per pound. Your firm initially spent $20,000 for the option. Should you exercise your option and purchase the steel for $450,000?
Expert Answer:
No based on the current information your firm should not exercise the option and purchase the steel ... View the full answer
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