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Problem 5: You enter into the following trade. Write a put option with a strike price of 30 Write a call option with a strike
Problem 5: You enter into the following trade. Write a put option with a strike price of 30 Write a call option with a strike price of 50 Both the call and put option are written on the same underlying and have the same expiration date. (1) Draw the payoff diagram for the combined option position. Be sure to label enough points on horizontal and vertical axis so that the payoff structure is clear. (2) The total premium you receive from writing the put and call options is $3.75. Assuming the interest rate is zero, what are the values of the underlying at expiration for which this trade breaks even
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