Question
You sold 2 put options with an exercise price X = $20 and bought 1 call option with X = $18. Both options expire in
You sold 2 put options with an exercise price X = $20 and bought 1 call option with X = $18. Both options expire in six months. At expiration, the stock price is $19. What is the payoff on this strategy? Note that each option is on one share of stock.
A. +2
B. +1
C. 0
D. -1
E. -2
Step by Step Solution
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For the two sold put options with an exercise price of 20 the payoff ...
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
