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Suppose a financial manager buys call options on 64,000 barrels of oil with an exercise price of $111 per barrel. She simultaneously sells a put
Suppose a financial manager buys call options on 64,000 barrels of oil with an exercise price of $111 per barrel. She simultaneously sells a put option on 64,000 barrels of oil with the same exercise price of $111 per barrel. Consider her gains and losses of oil prices are $89, $86, $94, $111, and $114. What if oil futures prices are $117.31 per barrel at expiration?
Market price | $89 | $86 | $94 | $111 | $114 | $117.31 |
Payoffs per barrel | $ | $ | $ | $ | $ | $ |
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