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Portfolio of options on shares of a non-dividend paying stock. The portfolio consists of: Long call with a strike price of 50 Short call with

Portfolio of options on shares of a non-dividend paying stock. The portfolio consists of:

  1. Long call with a strike price of 50
  2. Short call with a strike price of 55
  3. Long put with a strike price of 55
  4. Short put with a strike price of 50

All options expire in 2 months.The current price of one share of stock is 48.00. The risk-free interest rate is 3%.

1. Determine the cost of the portfolio?

2. Determine the maximum and minimum profit obtained at the end of 2 months?

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