Question: (1 point) Assume all rates are per annum continuously compounded Pfizer stock (PFE) is trading at $19.80 today. Consider a European call option on 1

 (1 point) Assume all rates are per annum continuously compounded Pfizer

(1 point) Assume all rates are per annum continuously compounded Pfizer stock (PFE) is trading at $19.80 today. Consider a European call option on 1 share of PFE with strike price $17.95 expiring in 7 months. The call is selling today for $0.53. The risk-free rate is 4.8%. (a) You buy one of these calls. In 7 months at expiration, PFE is trading at $18.55. What is the call worth at expiration? (b) What is your profit? (Note: a loss of X corresponds to a profit of -X). (c) Suppose PFE is trading at expiration for $15.95 but you exercise the call anyway. What is your profit? (d) Now instead suppose that PFE is trading at $19.95 at expiration and you had written one of the calls. What is your profit

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