What is the price of option if it is an american call

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Reference no: EM132042755

Consider an option on a non-dividend-paying stock when the stock is $ 30, the exercise price is $29. The risk –free rate is 5% per annum, the volatility is 25% per annum, and the time to maturity is four months.

(a) What is the price of the option if it is European call?

(b) What is the price of option if it is an American call?

Reference no: EM132042755

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