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We assume an index price of $1050, a 5% effective 6-month interest rate, and premiums of $76.34 for the 1025- strike 6-month call and $61.79

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We assume an index price of $1050, a 5% effective 6-month interest rate, and premiums of $76.34 for the 1025- strike 6-month call and $61.79 for the 1025-strike 6-month put. Suppose that you buy the S&R index, buy a 1025-strike put, and borrow $1180.16. (a) Compute the total payoff if the index price is $925 at expiration. (b) Compute the total profit if the index price is $950 at expiration. We assume an index price of $1050, a 5% effective 6-month interest rate, and premiums of $76.34 for the 1025- strike 6-month call and $61.79 for the 1025-strike 6-month put. Suppose that you buy the S&R index, buy a 1025-strike put, and borrow $1180.16. (a) Compute the total payoff if the index price is $925 at expiration. (b) Compute the total profit if the index price is $950 at expiration

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