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You expect that GM stock will not be very volatile over the next year. To take advantage of this expectation you create a trading strategy
You expect that GM stock will not be very volatile over the next year. To take advantage of this expectation you create a trading strategy that has the payoffs after one year depicted below. Please explain which options positions you would enter to create such a payoff (the figure below depicts the payoffs at maturity and ignores the option prices). Hint: you can implement the trading strategy either with call options or with put options. You expect that GM stock will not be very volatile over the next year. To take advantage of this expectation you create a trading strategy that has the payoffs after one year depicted below. Please explain which options positions you would enter to create such a payoff (the figure below depicts the payoffs at maturity and ignores the option prices). Hint: you can implement the trading strategy either with call options or with put options
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