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3 years ago

Both a call and a put currently are traded on stock XYZ; both have strike prices of $42 and maturities of six months.

Business

1 answer:

STatiana [176]3 years ago

7 0

Answer and Explanation:

The solution of profit/loss is shown below:-

Stock Price Profit/Loss

a. $32 -$4.30 After 6 months Stock price is less than strike price

b. $37 -$4.30 After 6 months Stock price is less than strike price

c. $42 -$4.30 After 6 months Stock price is equal than strike price

d. $47 $0.7 ($47 - $42 - $4.30)

e. $52 $5.7 ($52 - $42 - $4.30)

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solution

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