Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I 1 of 15 Mark You purchased one TXT put option with a strike price of $50, for a premium of $1.7 and wrote one

image text in transcribed

I 1 of 15 Mark You purchased one TXT put option with a strike price of $50, for a premium of $1.7 and wrote one TXT call option with a strike price of $61, for a premium of $2.2. Without considering transaction costs, what is the breakeven price of this position at expiration date (in half a year)? Pay attention, the underlying asset for both options is the same, so is the expiration date. The breakeven price of this position is $ Note: Please keep at least 4 decimal places in your calculations and at least 2 decimal places in your final answer. The correct answer is: 55.75

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

History Of Financial Institutions Essays On The History Of European Finance 1800–1950

Authors: Carmen Hofmann , Martin L. Müller

1st Edition

1138325007, 978-1138325005

More Books

Students also viewed these Finance questions