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Question 5 (14 points) The following is the payoff diagram of the trading strategy. Use this diagram and the information of option price from the
Question 5 (14 points) The following is the payoff diagram of the trading strategy. Use this diagram and the information of option price from the table below to answer the questions. The interest rate is 12% per annum. 5.1 Find the current stock price. (4 points) 5.2 Determine the cost of the above strategy. (2 points) 5.3 Write the payoff table or equation of this strategy. (5 points) 5.4 Calculate the minimum and maximum profits, and break-even stock price(s). (3 points)
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