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On December21,2020,you purchased 100shares of ABC company at$11per share.You plan to sell your shares on December21,2021and are concerned aboutdownside risk.A put option on ABC stock
On December21,2020,you purchased 100shares of ABC company at$11per share.You plan to sell your shares on December21,2021and are concerned aboutdownside risk.A put option on ABC stock with an exercise price (K) of$40is currently priced(P)at$2per share.Also,two call options on ABC stock with exercise prices (K) of$40and$65are priced(C)at$2.5and$1.50per share,respectively.All options expire on December21,2021.What will be net profit/loss per shareon a long collar (use K=$65 call)if the stock price is $40 per share?
A.$28.5
B.$53.5
C.$43.5
D.$45.5
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