European call options on the stock with a strike price

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Reference no: EM131052301

A speculator can choose between buying 100 shares of a stock for $40 per share and buying 1000 European call options on the stock with a strike price of $45 for $4 per option. For second alternative to give a better outcome at the option maturity, the stock price must be above $55 or $50? Explain.

Reference no: EM131052301

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