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You own a call option on Intuit stock with a strike price of $41. The option will expire in exactly three months. a. If the
You own a call option on Intuit stock with a strike price of $41. The option will expire in exactly three months. a. If the stock is trading at $48 in three months, what will be the payoff of the call? b. If the stock is trading at $29 in three months, what will be the payoff of the call? c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration. a. If the stock is trading at $48 in three months, what will be the payoff of the call? If the stock is trading at $48 in three months, the payoff of the call is $. (Round to the nearest dollar.) b. If the stock is trading at $29 in three months, what will be the payoff of the call? If the stock is trading at $29 in three months, the payoff of the call is $. (Round to the nearest dollar.) c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration. Which of the four graphs best represents the payoff diagram? (Select the best choice below.) a 20 15 10 OA. Cash Flow ($) 20 15 10 5 0 OB. Cash Flow ($) 5 10 15 20 25 30 35 40 45 50 55 60 -5 5 10 15 20 25 30 35 40 550 55 60 -10 -15 -203 -10 -15 -200 Stock Price (S) Stock Price (5) 5 a 20 15 20 15 10 10 5 OC. OD Cash Flow ($) 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 0 -5 5 10 15 20 25 30 35 40 45 50 55 60 -10 -10 - 15 -20 -15 -20 Stock Price ($) Stock Price ($)
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