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4. An investor bought a 70-strike European put option on an index with six months to expiration. The premium for this option was 1. The
4. An investor bought a 70-strike European put option on an index with six months to expiration. The premium for this option was 1. The investor also wrote an 80-strike European put option on the same index with six months to expiration. The premium for this option was 8. The six-month interest rate is 0%. Calculate the index price at expiration that will allow the investor to break even. An investor purchased Option A and Option B for a certain stock today, with strike prices 70 and 80 , respectively. Both options are European one-year put options. Determine which statement is true about the moneyness of these options, based on a particular stock price. A. If Option A is in-the-money, then Option B is in-the-money. B. If Option A is at-the-money, then Option B is out-of-the-money. C. If Option A is in-the-money, then Option B is out-of-the-money. D. If Option A is out-of-the-money, then Option B is in-the-money
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