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5- Greg fancies himself a shrewd investor. He has observed that the price of a given stock has remained more or less unchanged for the
5- Greg fancies himself a shrewd investor. He has observed that the price of a given stock has remained more or less unchanged for the last three weeks at around the $20 mark. Although he does not own any stock himself, he believes he can profit off this situation and sells Nicole the right to purchase this stock at a strike price of $25 anytime in the next six months. In return, Nicole agrees to pay Greg a premium of $2. During this time the company releases its earnings report. The company beats analysts' expectations and the stock price triples. Greg: I will make a profit II. has written a call option III. has written a put option IV. will suffer a loss A) I only B) II only C) III only D) II and IV only E) III and IV only
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