Which of the following inequalities correctly states the relationship between the difference in the prices of two European calls that differ only by exercise price
a. (X2¬ - X1)(1 + r)-T = Ce(S0,T,X1) - Ce(S0,T,X2)
b. (X2¬ - X1) = Ce(S0,T,X2) - Ce(S0,T,X1)
c. (X2 - X1)(1 + r)-T = Ce(S0,T,X1) + Ce(S0,T,X2)
d. (X2¬ - X1) = Ce(S0,T,X1) - Ce(S0,T,X2)
e. none of the above
Answer: A
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