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Options theory An investor buys 100 shares of a stock, shorts 50 call options on the stock with strike price of $80 and buys 50

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Options theory

An investor buys 100 shares of a stock, shorts 50 call options on the stock with strike price of $80 and buys 50 put options on the stock with strike price of $40. All options are one-year European options. Draw a diagram illustrating the value of the investor's portfolio as a function of the stock price after one year. 3

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