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Consider the following case: The market price of Stock F is $120 today (July 22, 2021). An investor buys a call option on stock F
Consider the following case: The market price of Stock F is $120 today (July 22, 2021). An investor buys a call option on stock F today with: Expiration date: September 17, 2021 Exercise price: $100 (Assumptions: The option is European-style (investors can only exercise the option at the expiration date) and we ignore other fees or costs on the option.) Question: Suppose on September 17, 2021, the market price of Stock F is $90. Will the investor exercise the option? Please provide your answer with • Margin Account & Margin Call Suppose the current price for Stock K is $10 per share. An investor wants to buy $2,000 worth of stock K ($2,000 = $10*200 shares of Stock K) through a margin account with the broker. The initial margin requirement is 50%. The initial pay of the investor is $1,200 and he will borrow the rest ($2,000 - $1,200 = $800) from the broker. Please answer the following questions with detailed steps.
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