Question
Mr. DRM received some information from his senior who is currently working for one of the top investment bank that Pfizer stock price has been
Mr. DRM received some information from his senior who is currently working for one of the top investment bank that Pfizer stock price has been rising due to approval of its covid-19 vaccine but due to its freezing conditions and other pharma companies advancement in the Covid-19 vaccine, it will not have any huge jumps either side rather it may fluctuate between $35 to $45 in the next three months and its current price on NYSE is $40. Assume that NYSE populated the three month call prices as $4, $5 and $6 for the strikes $35, $40 and $45 respectively. Assume that there are no arbitrage opportunities exists. Create the best strategy based this information and find out the maximum profit according to this strategy.
Please answer within 1 hour. I will like it.
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