The Value of a Call Option That Is Expected to Expire

question 357

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

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Definitions:

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