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An oil producer is interested in a European call option to buy a share for $150.00 that costs $8.00. The stock currently trades for $138.00.
An oil producer is interested in a European call option to buy a share for $150.00 that costs $8.00. The stock currently trades for $138.00. If the option is held to maturity, under what conditions does the holder of the option make a profit? Explain why.
Note: Use Excel for your work and ignore the time value of money.
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