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please answer 18 and 19 Canvas Question 18&19 are based on the tollowing intormation Suppose you are contemplating buying a house for $160,000. Your current
please answer 18 and 19
Canvas Question 18&19 are based on the tollowing intormation Suppose you are contemplating buying a house for $160,000. Your current wealth is $140.000 and you are unwilling to risk losing more than $20.000. A collar is established by (1) purchasing 2,000 shares of stock currently selling at $70 per share (2) purchasing 2,000 put options with exercise price $60 and (3) writing 2.000 calls with exercise price $80. Now, suppose at the option expiration, share price is $75 what is your payoff for the collar? o $150,000 S160.000 ? $140.000 $120.000 D | Question 19 1 pts Question 18 & 19 are based on the following information: Suppose you are contemplating buying a house for $160,000. Your current wealth is $140,000 and you are unwilling to risk losing more than $20,000. A collar is established by (1) purchasing 2.000 shares of stock currently selling at $70 per share (2) purchasing 2.000 put options with exercise price $60 and (3) writing 2.000 calls with exercise price $80. Now, suppose at the option expiration, share price is $75 what is your payoff for the collar? If the share price is $85, what would be the payoff for the collar? O $150.000 $160,000 $140.000Step by Step Solution
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