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How much money is owed due to the loan

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Question - A European call option, with exercise price $30 and expiry date in nine months' time, is bought for $3 financed by a loan at the interest rate of 6% (continuously compounding).

(a) On the expiry date T how much money is owed due to the loan?

(b) Calculate the share price S on the expiry date T in order to produce a profit of $5.

Reference no: EM133151254

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