Question: Find the maximum possible profit, the maximum loss include a babeled profit diagram. The current price of a non-dividend paying stock is 40 and the

Find the maximum possible profit, the maximum loss include a babeled profit diagram.

Find the maximum possible profit, the maximum loss include a babeled profit

The current price of a non-dividend paying stock is 40 and the continuously compounded risk-free rate of return is 4%. You enter into a short position on 4 Call options, each with 3 months to maturity, a strike price of 35, and initial premium of $6.13. Simultaneously, you enter into a long position on 5 Call options, each with 3 months to maturity, a strike price of 40, and an option premium of $2.78. Assuming all 9 options are held until maturity, what is the maximum possible profit? the maximum loss for the entire option portfolio? Include a labeled profit diagram to support your

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