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Suppose that a March call option to buy a share for $48 costs $5.39 and is held until March. Under what circumstances will the holder
Suppose that a March call option to buy a share for $48 costs $5.39 and is held until March. Under what circumstances will the holder of the option make a profit? Under what circumstances will the option be exercised?
The breakeven price is $, _______ i.e. if the stock price is greater than this breakeven price, the holder of the option will make a profit.
If the stock price is above $_______, the call option will be exercised.
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