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Q4.(6 Points) Option portfolio payoff: Suppose that the price of a share of stock in XYZ Corporation is currently trading at $20 per share. Consider
Q4.(6 Points) Option portfolio payoff: Suppose that the price of a share of stock in XYZ Corporation is currently trading at $20 per share. Consider buying the following two options on one share of XYZ : a. A Call option with strike price $20 b. A Put option with strike price $20 i. (5 Points) Draw a payoff diagram of this portfolio Note: Clearly label both axes and the location of each important point on the diagram (Points of intersections, points where the graph changes direction, etc.)
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