Question
You do not feel that the current price of XOM is correct. You expect that within the next 6 months, the company's stock price will
You do not feel that the current price of XOM is correct. You expect that within the next 6 months, the company's stock price will go either substantially down, or substantially up. Create the simplest investment strategy that will allow you to profit based on your beliefs. You are allowed to do only the following:
a) buy or sell ONE European call option
b) buy or sell ONE European put option
c) buy or sell ONE share of XOM at today's price
Note* You do not need to all 3 above actions (a, b, c). One or two may be perfectly fine.
Explain what exactly will you do in order to profit from your belief TODAY and why this is the right strategy
Step by Step Solution
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Step: 1
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Step: 2
Step: 3
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