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Assume that the risk free interest rates are zero. Consider an asset with spot price 50 The values of the following options on this asset
Assume that the risk free interest rates are zero. Consider an asset with spot price 50 The values of the following options on this asset are given below: (a) Synthesize a 45-56 bull spread using only the call options. Draw the P&L diagram at maturity of the bull spread (b) Synthesize a 45-56 bull spread using only the put options. Draw the P&L diagram at maturity of the bull spread (c) Synthesize a 45-56 bear spread using only the call options. Draw the P&L diagram at maturity of the bull spread
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