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An investor makes a strap strategy using the following asset when spot price of underlying is $45. European put with strike $45 for $3. European
An investor makes a strap strategy using the following asset when spot price of underlying is $45.
- European put with strike $45 for $3.
- European put with strike $55 for $4.0.
- European call with strike $45 for $4.5.
- European call with strike $45 for $3.5.
What is the payoff of the STRAP strategy if the spot price decreases to $30? Please complete the table below: Your answer shouldnt be more than ONE decimal places.
Option Position | ST | K | f (premium, price, value) | Net Pay off |
| $30 | $45 | $ | $ |
| $30 | $45 | $ | $ |
| $30 | $45 | $ | $ |
Strategy cost | $ |
| ||
Strategy Pay off | $ |
13 points
- Question 27 of 29
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