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13 Ps 7 Essay

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MGMT E-2000
Fall, 2014

Problem Set 7
(Due Tuesday, Dec. 2)

1. (20 pts)

On a recent day, Microsoft stock (symbol: MSFT) was at $25. Assume the nearby MSFT 25 call was selling for $1. Draw a hockey stick diagram for a long position in the MSFT 25 call.

2. (40 pts)

If the MSFT 24 call is selling for $2.50, ...

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