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Q1: Option portfolio payoff: Suppose that the price of a share of stock in ABC Corporation is currently trading at $30/share. Consider buying the following
Q1: Option portfolio payoff: Suppose that the price of a share of stock in ABC Corporation is currently trading at $30/share. Consider buying the following two options on one share of ABC: a. A Call option with a strike price of $25 b. A Put option with a strike price of $35 (i): (4 points) Draw a payoff diagram of this portfolio. Note: Clearly label both axes as well as the location of each important point on the diagram. Show which portion of the payoff is a result of which corresponding option
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