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Draw a payoff diagram showing the value of the call

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Reference no: EM133010423

You own a call option on Intuit stock with strike price of $42. The option will expire in exactly three months' time.  

Problem a. If the stock is trading at $54 in three months, what will be the payoff of the call?

Problem b. If the stock is trading at $34 in three months, what is the value of the call?

Problem c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration.

Reference no: EM133010423

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