ASM Exercise 8.6?

[floral]

Hi, dear all
I'v having difficulty with ASM exercise 8.6. In the question, we should compare 2 options, one without dividend and the other with 2 discrete dividends,right?
For the one with dividend, first dividend should be at time 0 (when the option is written.), second dividend should be at time 0.25. (3 month later)
It also says that the expiry occurs after 2nd dividend, how could it be a 6-month option? (Should it be 3-month option?)

Any thoughts?

Thank you very much!

[Abraham Weishaus]

I'll try to change the wording, but what I meant was that a dividend was paid right before the option was sold, so it doesn't count. Sort of like the immediate annuity you have on exams FM and M, which doesn't make its first payment for a year.

[floral]

Thank you very much for such a quick response!