Homework Answers
The seller of a call option makes money as long as the stock price is below the strike price at expiration. In this case the seller gets to keep the premium of $13 as long as the stock price does not go above $36 at expiration.
The option will be exercised when the stock price ends above the strike price at expiration. Since this is a European call option, early exercise is not permitted.
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An investor sells a European call on a share for $13. The strike price is $36. Under what circumstances does the in...
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