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8. A collar is established by buying a share of stock for $30, buying a six-month put option with exercise price $25, and writing a
8. A collar is established by buying a share of stock for $30, buying a six-month put option with exercise price $25, and writing a six-month call option with exercise price $35. Based on the volatility of the stock, you calculate that for an exercise price of $25 and maturity of six months, N011) : 0.65, whereas for the exercise price of $35, N(d1) : 0.30. What will be the gain or loss on the collar if the stock price increases by $2? { 10 marksl
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