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You shorted 1000 shares of PQU stock for $26 per share, which you plan to repurchase in three months. You are worried about price risk
You shorted 1000 shares of PQU stock for $26 per share, which you plan to repurchase in three months. You are worried about price risk and decide to use call options to fully hedge your stock position. 3-month PQU call options that have a strike price of $28 and a premium of $3.00. What is your portfolio's total gain/loss if at expiration the stock is selling for $30 per share?
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