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Have tried, 74, 75, 76 and all have been marked incorrect answer. Compare the profit at expiration for the following two positions: (A) A long
Have tried, 74, 75, 76 and all have been marked incorrect answer.
Compare the profit at expiration for the following two positions: (A) A long forward on Facebook that expires in one month. The forward price today is $75. (B) A long call option on Facebook that expires in one month with a strike price of 75 . The call price today is $2. (That is, K=75,C=2, T=1/12) Assuming zero interest rates. What is the lowest price of Facebook above which the forward position gives a higher profit at expirationStep by Step Solution
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