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Suppose you own a call options that permits you to purchase 100 shares of the stock of Silicon Graphics for $15 per share any time in the next three months. Silicon Graphics has a current market price of $12 per share. Should you excise the option and purchase the stocks if its price increases to $18? What would be your gain (loss) if you exercised the option and the immediately sold the stock.. Should you excise the option and purchase the stocks if its price increases to $13? What would be your gain (loss) if you exercised the option and the immediately sold the stock.

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