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An investor buys a stock option that costs $10 per share in order to exercise the option at $40 per share. Suppose the writer decides
An investor buys a stock option that costs $10 per share in order to exercise the option at $40 per share. Suppose the writer decides to write a naked option, graphically show and explain how the writer of this type of call can minimize his/her exposure to $5 per share. What is the name of the option profile that limits the loss of the writer?
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