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n investor is long on a Call on ABC shares with mort on a Put on PQR shares with X = 100. The C xpires in the money. Identify the correct statemen A. The investor profits from the Call position but loses on the Put position.

n investor is long on a Call on ABC shares with mort on a Put on PQR shares with X = 100. The C xpires in the money. Identify the correct statemen A. The investor profits from the Call position but loses on the Put position.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An investor is long on a Call on ABC shares with X = 100 and short on a Put on PQR shares with X = 100. The Call expires in the money. Identify the correct statement: A. The investor profits from the Call position but loses on the Put position. B. The investor profits from the Put position but loses on the Call position. C. The investor profits on both positions. D. The investor loses on both positions.
Transcribed Image Text:An investor is long on a Call on ABC shares with X = 100 and short on a Put on PQR shares with X = 100. The Call expires in the money. Identify the correct statement: A. The investor profits from the Call position but loses on the Put position. B. The investor profits from the Put position but loses on the Call position. C. The investor profits on both positions. D. The investor loses on both positions.
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