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You write an XYZ call with a strike price of 90. The option price is $4. a. Do you pay the premium, or do you
You write an XYZ call with a strike price of 90. The option price is $4.
a. Do you pay the premium, or do you collect the premium?
b. What order would you place to close this position?
c. Suppose that instead of closing the position, you hold the option to expiration. The price of XYZ at expiration is $100. What must you do, if anything? Find your profit or loss.
d. Suppose instead that the price of XYZ at expiration is $80. What must you do, if anything? Find your profit or loss.
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