The Value of a Call Option That Is Expected to Expire

question 38

Multiple Choice

The value of a call option that is expected to expire in the money can be expressed as:

• A) C₀ = E - S₀/(1 + R_f)^t.
• B) C₀ = S₀ - E/(1 + R_f)^t.
• C) C₀ = (S/C)(C₀) + S₀/(1 + R_f)^t.
• D) C₀ = (S/C)(C₀) - E/(1 + R_f)^t.
• E) C₀ = E - S1.

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