Question
a) Suppose that both a call and a put are traded on the stock of ABC Company; both have strike prices of $30 and mature
a) Suppose that both a call and a put are traded on the stock of ABC Company; both have strike prices of $30 and mature in one-year. What is the payoff to the call option if the stock price is $25 at the end of the year?
b) Suppose that both a call and a put are traded on the stock of ABC Company; both have strike prices of $30 and mature in one-year. What is the payoff to the call option if the stock price is $35 at the end of the year?
c) Suppose that both a call and a put are traded on the stock of ABC Company; both have strike prices of $30 and mature in one-year. What is the profit to the call option if the option premium is $3 and the stock price is $35 at the end of the year?
d) Suppose that both a call and a put are traded on the stock of ABC Company; both have strike prices of $30 and mature in one-year. What is the profit to the put option if the option premium is $4 and the stock price is $35 at the end of the year?
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