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(AMD) Underlying stock price $100 Put Expiration Aug Nov Aug Nov Strike 85 90 110 118 Call Last 18 14 3 2. Last 3 5

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(AMD) Underlying stock price $100 Put Expiration Aug Nov Aug Nov Strike 85 90 110 118 Call Last 18 14 3 2. Last 3 5 9 24 a. Show the profit and loss profile at expiration on your exam paper for each one of the following 2 The buyer of the call 85 August il The writer of the call 70 August The buyer of the put 110 August iv. The writer of the put 118 August b. Calculate the profit or loss at expiration of the August put 85 when S= 65, S=87, S= 112, S=120. Show your calculation, C. Calculate the Break even stock price d. Calculate intrinsic Value and Time value of the Aug Call 85 e. Calculate the intrinsic Value of the November Put 118 f. Are all options fairly priced? explain if there is any opportunity of arbitrage with any of the calls or the puts g. Your friend, an Option expert advises you to buy both the August 85 put option and the August 110 Call option. This strategy is called a Strangle. Calculate the initial cost, the breakeven stock price and plot the profit and loss profile as a function of the stock price for this strategy

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