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1. Consider a bond selling for $98 per $100 face value. A call option selling for $8 has an exercise price of $105. Answer the
1. Consider a bond selling for $98 per $100 face value. A call option selling for $8 has an exercise price of $105. Answer the following questions about a covered call. Determine the value of the position at expiration and the profit under the following outcomes: i) The price of the bond at expiration is $110 ii) The price of the bond at expiration is $88 iii) Determine the breakeven bond price at expiration.
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