Exam #1

The calls are in the money and the puts are not. ... Hedge #2: $12,000 profit plus..... the writing the calls - each call is 2 cents in the money times 40,000 == $ 800, buying the ten calls back = $ 8000..... collected $19,280 in the first place so you make $11,280 with call hedge plus $12,000 = $23,280 = profit g)(10 points) Given scenario #2 ... ................
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