Question
A one-year call option on Facebook with a strike price of $60 costs $6; a one-year put option on the stock with a strike price
A one-year call option on Facebook with a strike price of $60 costs $6; a one-year put option on the stock with a strike price of $60 costs $8. Suppose that a trader buys two call options and one put option. (Show Work)
| Strike Price | Cost Each | Number Bought | |
| Call Option | $60 | $6 | 2 |
| Put Option | $60 | $8 | 1 |
What is the breakeven stock price above which the trader makes a profit?
What is the breakeven stock price below which the trader makes a profit?
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The Oxford Guide To Financial Modeling
Authors: Thomas S Y Ho, Sang Bin Lee
1st Edition
019516962X, 9780195169621
