The payoff graph of an investment including several 1-year European call options on a stock is...
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The payoff graph of an investment including several 1-year European call options on a stock is given below. payoff R S(T) 50 62 66 70 You are also given call option premiums as follows: Strike price Call premium 50 8 62 3 66 1.5 70 1 The continuously compounded interest rate is 1.7%. Calculate the profit of the investment assuming that stock price is 67 at expiration time. The payoff graph of an investment including several 1-year European call options on a stock is given below. payoff R S(T) 50 62 66 70 You are also given call option premiums as follows: Strike price Call premium 50 8 62 3 66 1.5 70 1 The continuously compounded interest rate is 1.7%. Calculate the profit of the investment assuming that stock price is 67 at expiration time.
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