Anticipating an apple appreciation

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Reference no: EM131059214

Anticipating an Apple appreciation, you buy a 10/2016 $120 American-style Apple call option for $2.00 today. Being an American-style, you can early exercise it in September.

1) If you early exercise this call in September, what will be the payoff in September?

2) At what Apple price in September will you early exercise? Or, will you ever early exercise it? Explain.

Reference no: EM131059214

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