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You shorted a call option on Intuit stock with a strike price of $37. When you sold (wrote) the option, you received $4. The option
You shorted a call option on Intuit stock with a strike price of $37. When you sold (wrote) the option, you received $4. The option will expire in exactly three months' time. a. If the stock is trading at $53 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $29 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. You shorted a call option on Intuit stock with a strike price of $37. When you sold (wrote) the option, you received $4. The option will expire in exactly three months' time. a. If the stock is trading at $53 in three months, what will your payoff be? What will your profit be? b. If the stock is trading at $29 in three months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the payoff at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits
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