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Risk-Free Rate
The theoretical rate of return on an investment with zero risk, often represented by the yield on government bonds.
Call Option
A financial contract giving the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.
In The Money
A term describing an option contract that has intrinsic value, indicating it's profitable to exercise it.
Exercise Price
The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.
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