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2. Suppose the effective annual interest rate is 8% and option contracts of one year. Draw payoff and profit diagram for the following options a.

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2. Suppose the effective annual interest rate is 8% and option contracts of one year. Draw payoff and profit diagram for the following options a. (4 points) 35-strike call with premium 5.14. b. (4 points) 40-strike put with premium 3.26

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