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Create a payoff-profit table for a 6-month Bear Put Spread on ZOO stock of width 3 where the lower strike put option is at the
Create a payoff-profit table for a 6-month Bear Put Spread on ZOO stock of width 3 where the lower strike put option is at the money. Recall that any needed option prices can be derived from the Put-Call Parity formula. For the table, assume spot prices from 38 to 48 in increments of 1.
b) What is the maximum risk for this position?
c) What is the breakeven spot price in 6 months?
d) What is the maximum profit for this position?
Please and Thanks!
You are given a table of 6-month call option prices for ZOO Animals Ltd. (ZOO). ZOO is currently trading at $40. The 6 month risk free rate is 5.00. Call Premium Strike Price 40 43 2.86 1.54 0.75 46Step by Step Solution
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