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Draw well-labelled diagrams showing the payoffs for the following investments as a function of the price of the stock index at maturity. Assume throughout that

Draw well-labelled diagrams showing the payoffs for the following investments as a function of the price of the stock index at maturity. Assume throughout that the price of each option contract is $5 and that one option contract is for one unit of investment in the index.

(a) Buy the index and sell a call at strike price $100.

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