Question
23) Assume the same investor decided to purchase a European call option on stock ABC. Further assume that the current price of the stock is
"23) Assume the same investor decided to purchase a European call option on stock ABC. Further assume that the current price of the stock is $130. The investor paid $10 for the call with the strike price at $155. (A)If the stock price goes up to $160, what is the payoff to the investor? (B) Further assumes that the investor also decided to sell a European put option on the same underlying with the same strike price of $155 and option cost of $10. What is the payoff to the investor when the stock price moves to $175? Which of the following combination of answers best capture the payoffs for situations described in A and B? "
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