Plot the profit versus the share price at expiration date

Reference no: EM13908677

Consider two calls, one with an exercise price of $40 and one with an exercise price of $45. Assume that the call with the $40 exercise price sells for $8 and the call with the $45 exercise price sells for $5. Assume that they have the same expiration date. Consider the strategy of issuing two $45 calls and purchasing one $40 call. Plot the profit versus the share price at the expiration date.

Reference no: EM13908677

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