Draw the profit line for each of the following individuals, assuming S = $100, E = $100, and C = P = $10 in all cases, unless otherwise stated: a) The person who buys a stock and buys a put on it. b) The person who buys a call and sells a put on the same stock. c) The person who simultaneously buys a call and a put on the same stock. d) The person who buys a call and sells another call with a higher exercise price on the same stock.

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.