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Sam buys a call option on Amazon for a premium of $2. It has a strike (exercise) price of $25. If the current stock price
Sam buys a call option on Amazon for a premium of $2. It has a strike (exercise) price of $25. If the current stock price of Amazon is $30, what is the total PROFIT (note, give the profit, not the payoff) if the option is immediately exercised?
- A. $2
- B. $3
- C. $5
- D. $7
Suppose you buy a put option for a premium of $5 and a strike price of $80. For the buyer of the put, what is the maximum profit possible (note: your answer should be the max profit not payoff)?
- A.
$5
- B.
$75
- C.
$80
- D.
$85
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