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Suppose I buy a call option with strike K and sell a put option with the same strike on the same underlying stock and with
Suppose I buy a call option with strike K and sell a put option with the same strike on the same underlying stock and with the same expiration date. What is the payoff MT at expiration for this portfolio? Draw the corresponding payoff diagram. Use S = stock price, and K = Strike price
(Hint: It is a simple function of S and K.)
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