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We assume an index price of $975, a 6% effective 6-month interest rate, and premiums of $75.89 for the 925- strike 6-month call and $57.62
We assume an index price of $975, a 6% effective 6-month interest rate, and premiums of $75.89 for the 925- strike 6-month call and $57.62 for the 925-strike 6-month put. Suppose that you buy the S&R index, buy a 925-strike put, and borrow $1004.55. (a) Compute the total payoff if the index price is $925 at expiration. (b) Compute the total profit if the index price is $1025 at expiration. We assume an index price of $975, a 6% effective 6-month interest rate, and premiums of $75.89 for the 925- strike 6-month call and $57.62 for the 925-strike 6-month put. Suppose that you buy the S&R index, buy a 925-strike put, and borrow $1004.55. (a) Compute the total payoff if the index price is $925 at expiration. (b) Compute the total profit if the index price is $1025 at expiration
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