Call option if it can be exercised prior to maturity

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A call option on IBM has an exercise price of 100, the share price S is 120. The option will exprie in 6 months, and the riskfree rate is 10% p.a. and the historical variance of the returns of IBM is 12% p.a.   Before the option expires, IBM is expected to pay 2 regular dividends of $2 per share at the end of teh second month and the fifth month. Please determine the prices of this IBM call option if it can be exercised prior to maturity.

Reference no: EM131087648

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