A stock is priced at 85 and 9-month options are written on the stock. An...

60.1K

Verified Solution

Question

Finance

A stock is priced at 85 and 9-month options are written on the stock. An investor writes an 82-strike European put for 7.25 and buys an 86-strike call for 7.77.
If the force of interest is 4%, calculate this investor's total profit after 9 months given that the stock price is 81 at that time.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students