Question
The following information is available on company ABC. CALLS PUTS ABC X MAR APR MAY MAR APR MAY 119 120 6 8 11 1 3
The following information is available on company ABC.
CALLS PUTS
ABC X MAR APR MAY MAR APR MAY
119 120 6 8 11 1 3 4
119 125 2 5 8 2 4 6
119 130 1 3 6 5 7 9
You create a (long) straddle using the May maturity and the strike price of $120. What is the maximum loss at maturity of this straddle?
| -$1300
| ||
| An infinite potential loss
| ||
| -$1400
| ||
| -$1500
|
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Cost Of Capital Applications And Examples
Authors: Shannon P. Pratt, Roger J. Grabowski, Richard A. Brealey
5th Edition
1118555805, 9781118555804
