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1 . An investor buys a European put on a share for $ 5 . The stock price is $ 5 5 and the strike

1. An investor buys a European put on a share for $5. The stock price is $55 and the strike price is $50. Draw a graph to show the variation of the investor's profit with the stock price at the maturity of the option. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised?
2.(20 points) An investor takes the position below on the same stock with a strike price of $100 and the same maturity:
Buy 1 XYZ call at $3.30
Buy 1 XYZ put at $3.20
i.(3 points) What is the name of this strategy?
ii.(3 points) What is the aim of this investor?
iii. (12 points) Draw a graph to show the possible profit and loss. (dont forget to show break-even points, strike price etc.)
iv.(2 points) At which stock price maximum loss is realized and what will be the maximum loss?

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