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1 . For each of the following cases, calculate ( i ) the cashflow paid or received today on entering the position, ( ii )
For each of the following cases, calculate
i the cashflow paid or received today on entering the position,
ii the gross payoff at expiry, and
iii the net payoff from your option trading
All options are European style and cover shares in the underlying asset.
a You enter a long call option with a strike price of $ and premium of $ At expiry, the share price is $
b You enter a long call option with a strike price of $ and premium of $ At expiry, the share price is $
c You enter a short call option with an exercise price of $ and premium of $ The share price at expiry is $
d You enter a short call option with an exercise price of $ and premium of $ The share price at expiry is $
e You buy a longput option with a strike price of $ for a premium of $ At expiry, the share price is $
f You write ie short a put option with strike price $ for a premium of $ At expiry, the share price is $
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