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An investment fund may short a bank's stock if it believes that the stock is overvalued and is likely to decline in price. The fund can profit by taking a short position in the bank's stock and reaping the reward of the decline in price. A call option gives the holder the right, but not the obligation, to buy a certain number of shares of the bank's stock at a predetermined price (the strike price) on or before a certain date (the expiration date). An investor may purchase a call option in a ban
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