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Question
The premium on a long term call option on the market index with an exercise price of 950 is $12.00 when originally purchased. After 6 months the position is closed, and the index spot price is 965. If interest rates are 0.5% per month, what is the Call Payoff?A) $2.64
B) $12.00
C) $12.36
D) $15.00
Answer
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