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A option contract gives its owner the right to buy of securities at an agreed-upon...

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Accounting

A option contract gives its owner the right to buy of securities at an agreed-upon price $106 in maturity. Current price of the stock is $100. There is an increase in the stock market and price of the stock is expected to rise. Increase of the amount in prices is an exponentially distributed random variable with parameter =15. What is the expected profit of the investor? (Hint: see the dynamics of a call option first.)

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