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Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity. Strike Price Option Price In $ Call Option Put Option 40 $3.5 $1.1 42 $3.1 $1.5 Suppose that an investor is interested to construct a Box spread using call option information above. If the market price of underlying at maturity is $45, complete the table below?

Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity. Strike Price Option Price In $ Call Option Put Option 40 $3.5 $1.1 42 $3.1 $1.5 Suppose that an investor is interested to construct a Box spread using call option information above. If the market price of underlying at maturity is $45, complete the table below?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity. Strike Price Option Price In $ Call Option Put Option 40 $3.5 $1.1 42 $3.1 $1.5 Suppose that an investor is interested to construct a Box spread using call option information above. If the market price of underlying at maturity is $45, complete the table below? Option ST K Position f (premium, price, value) Net Pay off $45 $ $ $ Long call 24 Short call $45 $ 2$ $45 $ %24 24 Long Put Short Put $45 $ 24 24 Strategy cost $ Strategy Pay off 24 Cliak Squn and Sul and subrmit Click Sque All Ansuers to saue all ansvers
Transcribed Image Text:Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity. Strike Price Option Price In $ Call Option Put Option 40 $3.5 $1.1 42 $3.1 $1.5 Suppose that an investor is interested to construct a Box spread using call option information above. If the market price of underlying at maturity is $45, complete the table below? Option ST K Position f (premium, price, value) Net Pay off $45 $ $ $ Long call 24 Short call $45 $ 2$ $45 $ %24 24 Long Put Short Put $45 $ 24 24 Strategy cost $ Strategy Pay off 24 Cliak Squn and Sul and subrmit Click Sque All Ansuers to saue all ansvers
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