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What can be inferred about expectations regarding the stock

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Reference no: EM132522707

You are long two calls on the same stock with the same exercise date. The exercise price of the first call is $40 and the exercise price of the second call is $60. In addition, you are short two call on that same stock and with the same exercise date, both with an exercise price of $50. Plot the payoff of this combination as a function of the stock price on the exercise date.

Question 1: Given that you have invested in this portfolio, what can be inferred about your expectations regarding the stock's price on the expiration date?

Reference no: EM132522707

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