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Please provide detailed explanations please! thanks in advance! Assume today you got a portfolio stock options on Amazon (AMZ) as below: 1. Buy one $1500
Please provide detailed explanations please! thanks in advance!
Assume today you got a portfolio stock options on Amazon (AMZ) as below: 1. Buy one $1500 strike price AMZ European call option for $675 2. Sell one $2500 strike price AMZ European call option for $150 3. Sell one $1500 strike price AMZ European put option for $25 4. Buy one $2500 strike price AMZ put option for $400 All options will expire one year later, the annual risk-free interest rate is zero. (a) What's the cost of the portfolio of options today? (b) How does the total payoff of the portfolio of options changes with the price of AMZ at expiration? (c) At expiration, What's the total payoff of the portfolio of options Assume today you got a portfolio stock options on Amazon (AMZ) as below: 1. Buy one $1500 strike price AMZ European call option for $675 2. Sell one $2500 strike price AMZ European call option for $150 3. Sell one $1500 strike price AMZ European put option for $25 4. Buy one $2500 strike price AMZ put option for $400 All options will expire one year later, the annual risk-free interest rate is zero. (a) What's the cost of the portfolio of options today? (b) How does the total payoff of the portfolio of options changes with the price of AMZ at expiration? (c) At expiration, What's the total payoff of the portfolio of optionsStep by Step Solution
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