Question: Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances

Suppose that a March call option on a stock with a strike price of $50 costs $2.50 and is held until March. Under what circumstances will the holder of the option make a gain? Under what circumstances will the option be exercised? Draw a diagram showing how the profit on a long position in the option depends on the stock price at the maturity of the option.

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