The risk of the underlying stock and the call price

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Reference no: EM131931940

1. What is the relationship between the risk of the underlying stock and the call price? Explain in intuitive terms.

2. If the stock trades for $130, and the expiring put with an exercise price of $145 trades for $18, how would you trade?

3. What is the gamma of a share of stock if the stock price is $55, and a $50 call on the stock is priced at $7 while a $50 put is priced at $4? Explain.

Reference no: EM131931940

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