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Suppose that you sell CDT stock short at $23 and at the same time you write a call option on CDT with a strike price
Suppose that you sell CDT stock short at $23 and at the same time you write a call option on CDT with a strike price of $22 and a premium of $2. What is the combined profit or loss on the two positions together if just prior to expiration of the call option the price of CDT is $24? Assume that you cover your short position (meaning you get rid of the short position) just prior to the time of option expiration. a. $1 b. ($1) c. ($2) d. $2 e. $0
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