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2: We assume an index price of $1100, a 9% effective 6-month interest rate, and premiums of $81.07 for the 1150- strike 6- month call
2: We assume an index price of $1100, a 9% effective 6-month interest rate, and premiums of $81.07 for the 1150- strike 6- month call and $66.02 for the 1150-strike 6-month put. Suppose that you buy the S&R index, buy a 1150-strike put, and borrow $1079.35. (a) Compute the total payoff if the index price is $925 at expiration. (b) Compute the total profit if the index price is $1200 at expiration. (A) -25.49 (B)-24.49 (C)-22.49 (D) -26.49 (E)-23.49 2(a): Select Part (a) choices. (A)-70.96 (B) -71.96 (C) -73.96 (D) -74.96 (E) -72.96 2(b): Select t Part (b) choices
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