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Suppose the effective annual interest rate is 7%. Consider a 1-year call option on a stock with an exercise price of $70 and an option
Suppose the effective annual interest rate is 7%. Consider a 1-year call option on a stock with an exercise price of $70 and an option premium of $10.36. What profit does the owner of this call earn if the underlying stock is worth $78 when the option is exercised?
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