Call option considering that this is a NAKED call

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We have 10,000 common shares of Procter and Gamble, each of which we bought for $38. The premium is $1.5, and the strike price is $45 per share. Expound on the results, in two different cases. In the first case, the market price rises to $60, and in the second case it falls to $38. Compute the rate of return for both the seller and the buyer of the P&G call option considering that this is a NAKED call.

Reference no: EM13970909

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