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How do you solve this? A strategy consists of buying a market index product at $874 and longing a put on the index with a
How do you solve this?
A strategy consists of buying a market index product at $874 and longing a put on the index with a strike of $874. If the put premium is $18 and interest rates are 0.5% per month, compute the profit or loss from the long index position at expiration (in 6 months) if the market index is $831. Assume monthly compounding.
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