Give a better outcome at the option maturity

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Reference no: EM131989482

A speculator can choose between buying 100 shares of a stock for $40 per share and buying 1000 European call options on the stock with a strike price of $45 for $4 per option.

For second alternative to give a better outcome at the option maturity, the stock price must be above 50 or below 50 explain?

Reference no: EM131989482

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