An investor made the following trades. Bought a share of stock for $45 Bought a put option, X = 45 for $4 Wrote a call option, X = 50 for $5 If the stock price is $60 at the expiration of the options, what is the total profit to the investor?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
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An investor made the following trades. Bought a share
of stock for $45 Bought a put option, X = 45 for $4
Wrote a call option, X = 50 for $5 If the stock price is $60
at the expiration of the options, what is the total profit
to the investor?
Transcribed Image Text:An investor made the following trades. Bought a share of stock for $45 Bought a put option, X = 45 for $4 Wrote a call option, X = 50 for $5 If the stock price is $60 at the expiration of the options, what is the total profit to the investor?
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