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  3. 4. 1) suppose that a european call option to buy a

4. 1) Suppose that a European call option to buy a share for $100.00 costs...

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4. 1) Suppose that a European call option to buy a share for $100.00 costs $5.00 and is held until maturity. (a) Ignoring the time value of money, under what circumstances will the holder of the option make a profit? (b) Under what circumstances will the option be exercised? (C) Draw a diagram illustrating how the profit from a long position in the option depends on the stock price at maturity of the option

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