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Suppose an investor is speculating with a strategy employing a long position in a call option with strike price of $830 and a short position
Suppose an investor is speculating with a strategy employing a long position in a call option with strike price of $830 and a short position in a call option with strike price of $850. The premiums for the 830-strike call and 850-strike call are $43.25 and $30.51 respectively. Both options expire in 6 months and the continuously compounding annual interest rate is 5%. At what stock price 6 months later, does the investor break even?
A. $850.00 B. $843.39 C. $843.06 D. $842.74 E. $830.00
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