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Please help Suppose you are given the following prices for the options on ABC stock: Strike (in $) 15.0 17.5 20.0 call 1.5 1.1 0.8
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Suppose you are given the following prices for the options on ABC stock: Strike (in $) 15.0 17.5 20.0 call 1.5 1.1 0.8 put 2.0 2.5 3.2 a) Suppose you take the following position: long one call with strike 15.0, short two calls with strike 17.5, and long one call with strike 20.0. Please draw the payoff at maturity What would be the total gain (loss) on the above position if the stock price at maturity turned out to be S(T)-16.5 (taking into account the price of the options)? b) Suppose you are given the following prices for the options on ABC stock: Strike (in $) 15.0 17.5 20.0 call 1.5 1.1 0.8 put 2.0 2.5 3.2 a) Suppose you take the following position: long one call with strike 15.0, short two calls with strike 17.5, and long one call with strike 20.0. Please draw the payoff at maturity What would be the total gain (loss) on the above position if the stock price at maturity turned out to be S(T)-16.5 (taking into account the price of the options)? b)Step by Step Solution
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