Question
An investor buys a one - year European - style call option on the same stock. The strike is $105 , and the premium is
An investor buys a one - year European - style call option on the same stock. The strike is $105 , and the premium is $5. In a year, the spot stock price is $90 per share. What is the payoff from financially settling the long call position? $__________ In a year, the spot stock price is $95 per share. What is the payoff from financially settling the long call position? $__________ In a year, the spot stock price is $100 per share. What is the p ayoff from financially settling the long call position? $__________ In a year, the spot stock price is $105 per share. What is the payoff from financially settling the long call position? $__________ In a year, the spot stock price is $110 per share. What is the payoff from financially settling the long call position? $__________ 5. Draw the hockey stick for this position, including and excluding the premium; remember to label both axes and mark the break - even value.
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