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Current stock price is 22 while a call option is available with a strike price of 25 at a price of 1.57. A 1:2 Hedge
Current stock price is 22 while a call option is available with a strike price of 25 at a price of 1.57. A 1:2 Hedge is formed. If after a certain time, stock price declines to 15.5, Net Profit (Loss) of the trader is? In contrast, if stock price increases to 26, net profit (loss) will be ? . At a stock price of ?and ? , net payoff will be zero.
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