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I just want to know how they got the answer for Sell two call options each with a strike price of 40$. I really don't
I just want to know how they got the answer for "Sell two call options each with a strike price of 40$". I really don't understand how they got this solution and if its supposed to have a formula or something. I do not understand how they got this answer. Please help!
If there if a formula for this or something please write it down too!
Q3: Option portfolio payoff (8 Points): Suppose that the price of a share of stock in ABC Corporation is currently trading at $30 /share. Consider building a portfolio with the following option positions: a. Buy a Call option with a strike price of $25 c. Sell two call options each with a strike price of $40 d. Buy a call option with a strike price of $55 Draw a payoff diagram of this portfolio. Note: Clearly label both axes as well as the location of each important point on the diagramStep by Step Solution
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