Q1:

A trading strategy called INVE3000 strategy, is created by taking two long calls (with strike K1, premium C1), one short put (with strike K2and premium P2), and one long put (with strike K3and premium of P3). We know that K1

Q2:

A stock price is currently $25. It is known that at the end of two months it will be either $23 or $27. The risk-free interest rate is 10% per annum with continuous compounding. Suppose ST is the stock price at the end of two months. What is the value of a derivative that pays off max(ST(ST-S0),0)at this time? (Hint: risk neutral valuation formula is a general formula, not just for pricing options.)