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A stock is currently trading for $25 per share and an investor is interested in the following two options with a one-vear expiration term. a)

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A stock is currently trading for $25 per share and an investor is interested in the following two options with a one-vear expiration term. a) Draw the profit diagram for a short position in the put option described above. Label the diagram well. Show all the critical points on the diagram. For example, the intercepts on axes, maximum profit or maximum loss. What price movements are required for the investor to have a positive profit? b) Draw the profit diagram for a long position in the call option. And label the diagram well. c) Suppose one month later, the stock price moves up to $30 per share, how will the prices of the call and put change? Why? Briefly explain

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