(Answered) Question consider an option that entitles the holder to

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Question: Consider an option that entitles the holder to purchase one share at any time during the next 4 years. The subscription price, however, is a function chime and is set at $10 for the first 2 years, increasing to $12 thereafter. At the end of year 2, the underlying shares trade at $ 11. On what basis would you decide whether to exercise the option at that time? Discuss.

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