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What circumstances does the investor make a profit

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Reference no: EM133436004

Question: An investor sells a European call on a share for $4. The stock price is $47 and the strike price is $50. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Draw a diagram showing the variation of the investor's profit with the stock price at the maturity of the option.

Reference no: EM133436004

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