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a) An investor looks at market reports and sees you can but Rio Tinto call option over 1000 shares at $8 with a strike price
a) An investor looks at market reports and sees you can but Rio Tinto call option over 1000 shares at $8 with a strike price of $88 and a 6 month expiry. After 4 months the physical price goes to $100. What can the investor do to achieve the best outcome? With aid of a diagram identify and quantify the gains/losses of the writer and buyer? b)Using a diagram, explain how the gains and losses of both the buyers and sellers or futures contracts differ from buyers and sellers of call options.
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