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Suppose that a September call option to buy a share for $100 costs $5 and is held until September. Under what circumstances will the holder

  1. Suppose that a September call option to buy a share for $100 costs $5 and is held until September. Under what circumstances will the holder (long position) of the option make a profit? Under what circumstances will the option be exercised? Draw a diagram illustrating how the profit from a long position in the option depends on the stock price at maturity of the option.

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