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X and Y are two American call options on the same stock with the same strike price. X has six month to expiration, while Y has three month to expiration. Which of the following must be true?

a. X is less expensive than Y.

b. X is more expensive than Y.

c. X is more actively traded than Y.

d. X is less actively traded than Y.

e. If the stock price increases, X will decrease in value and Y will increase in value.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92163488

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