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c. You wish to create a financial instrument that has a payoff in 6 months' time equal to the maximum value of $2,000 and
c. You wish to create a financial instrument that has a payoff in 6 months' time equal to the maximum value of $2,000 and $2,000 + $0.5*(S&P Index in 6 months' time 3,200). The 6-month call and put options with strike price 3,200 is trading at 120 and 110, respectively. What is the cost of your instrument? (9 marks)
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Vector Mechanics for Engineers Statics and Dynamics
Authors: Ferdinand Beer, E. Russell Johnston, Jr., Elliot Eisenberg, William Clausen, David Mazurek, Phillip Cornwell
8th Edition
73212229, 978-0073212227
