### Consider a european call option on a stock

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Consider a European call option on a stock, with 1 year to expiration, and a strike price of 50. Suppose that the risk-free rate is 4% APR with semiannual compounding, and that the call premium (or price) is \$1. a) What price must the stock be in 1 year so that the profit to the long call is the same as the profit to the short call? b) Does anything change if the stock pays dividends?

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