Should the investor exercise the call option or not

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The XYZ Company expects stock prices to increase. The current stock price is $37. The company purchases a call option, with an exercise price of $40 and a premium of $2 per share. Assume instead that the stock price was $39 just before the expiration date. Should the investor exercise the call option or not? What will the total payoff per share be?

Reference no: EM131075889

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