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Which is the price of an american call option on same stock

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Reference no: EM132873281

Question 1: The price of a European call option on a non-dividend paying stock is $3.48. Which of the following is the price of an American call option on the same stock with the same strike price and maturity as that of the European call option? The strike price is $60, volatility is 40%, interest rate is 8%, and the time to maturity is 9 months.

Select one:

a. $4.12
b. $2.16
c. $1.60
d. The given information is insufficient to answer the question
e. None of the given choices is correct

Reference no: EM132873281

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