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Net profit on the option contract be

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1. a) A six month call option on 100 shares of ABC company is selling for $30. The strike price for the option is $4. The sharer is currently selling at 3.80 per share.

1) Ignoring brokerage fees, what price must the share achieve just to cover the expense of the option?

2) If the share price rises to 4.75% at the time of expiration what will the net profit on the option contract be?

3) Please draw and label the diagram

Reference no: EM132543480

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