Multiple Choice
A stock that pays no dividends has a price of $50. The rate of interest is 10%. The one-month maturity, 60-strike American put is optimally exercised. What can you infer about the insurance value of the option at the time of exercise?
A) The minimum insurance value is $0.62
B) The minimum insurance value is $0.50
C) The maximum insurance value is $0.41
D) The maximum insurance value is $10
Correct Answer:
Verified
Correct Answer:
Verified
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