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Draw a diagram showing the variation of an investor’s profit and loss with the terminal stock price for a portfolio consisting of
a) One share and a short position in one call option
b) Two shares and a short position in one call option
c) One share and a short position in two call options
d) One share and a short position in four call options In each case, assume that the call option has an exercise price equal to the current stock price.
Please explain your answer.
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