Question
John Co. stock currently trades for $40 per share. You can buy a call option on John's stock with a strike price of $60.00 and
John Co. stock currently trades for $40 per share. You can buy a call option on John's stock with a strike price of $60.00 and a maturity date in exactly 6 months for $6.00. What should the price of a put option with the same strike price and maturity date be? Use a risk-free rate of 2.00% and give the answer to 2 decimal places.
You have written one put on John stock with a strike price of $20, purchased a call on John stock with a strike price of $30, and purchased a put on John's stock with a strike price of $40. What is the payoff to your portfolio of options if John's stock currently trades for $40 per share? Give the answer to 2 decimal places.
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