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A call option with a strike price of 1=$1.65 and premium of 1=$0.05. This option will expire in 3 months. 1) Draw a payoff and
A call option with a strike price of 1=$1.65 and premium of 1=$0.05. This option will expire in 3 months.
1) Draw a payoff and profit chart seperately for the option holder under different market prices. In the payoff chart, mark clearly the area for in-the-money, out-of-the money, at-money and the breakeven point.
2) Draw a payoff and profit chart seperately for the option holder underwriter under different market prices.
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