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Question 9: Options trading strategies Consider the following portfolio composed of two European options (maturing on the same date) written on the same stock: Long
Question 9: Options trading strategies
Consider the following portfolio composed of two European options (maturing on the same date) written on the same stock:
Long one European call option with a strike price K
Short one European put option with a strike price K
a). What is the payoff of this portfolio at date T (as a function of the date T stock price)?
b). Which other derivative has the same type of payoff?
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