Question
Consider a portfolio containing options on the stock of Amazon (ticker: AMZN). Suppose today you buy a $1,900-strike Amazon call option for $300, sell a
Consider a portfolio containing options on the stock of Amazon (ticker: AMZN).
Suppose today you buy a $1,900-strike Amazon call option for $300, sell a $2,000-strike Amazon call option for $275, sell a $1,900-strike Amazon put option for $100, and buy a $2,000-strike Amazon put option for $150. All options have an expiration date that is one year from today and the annual risk-free interest rate is zero. What is the total payoff of the portfolio of options at expiration?
A. You pay $100
B. You receive $100
C. You receive $2000
D. You receive $1900
E. Payoff depends on the stock price at expiration.
Can you help me with this question ? Thank you
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