Suppose that you sell a one-year European call option with a strike of $13 and...
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Suppose that you sell a one-year European call option with a strike of $13 and buy a one- year European put option with a strike of $7. The call option is trading at $2 and the put option is trading at $3. Which figure below shows the correct profit diagram? Profit 6 Profit 1 Stock Price 13 Stock Price 13 - 1 7 -6 Figure 1 Figure 2 Profit Profit 4 2 Stock Price 13 7 Stock Price 13 -2 -4 Figure 3 Figure 4
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