Question
You buy the call and the put in the chart below. What is the range of prices for IBM's stock where this strategy is profitable;
You buy the call and the put in the chart below. What is the range of prices for IBM's stock where this strategy is profitable; that is, what are two breakeven points for the strategy?
IBM Price
Stock Price $100
3 month call with $100 strike $5
3 month put with $100 strike $5
a. $95 and $105
b. $90 and $105
c. $90 and $110
d. $95 and $110
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
