You purchase a call with a strike of K-22 at a premium of 1.73 and you purchase a put with astrike of K-22 at a premium of 2.13. At maturity, the underlying is worth 15.31. What is yourprofit (or loss)?{Enter your answer in dollars with 2 decimals, but do not use the "$". Enter a loss with anegative sign. For example, if the profit/loss is -123.45, enter-123.45 with the negative signfor your answer. }

Profit on Call option= Max(St-K,0)-Premium=Max(15.31-22,0)-1.73=-1.73Profit on Put Option=…

You purchase a call with a strike of K-22 at a premium of 1.73 and you purchase a put with a strike of K=22 at a premium of 2.13. At maturity, the underlying is worth 15.31. What is your profit (or loss)?

You purchase a call with a strike of K-22 at a premium of 1.73 and you purchase a put with a strike of K=22 at a premium of 2.13. At maturity, the underlying is worth 15.31. What is your profit (or loss)?

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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Question

You purchase a call with a strike of K-22 at a premium of 1.73 and you purchase a put with a
strike of K-22 at a premium of 2.13. At maturity, the underlying is worth 15.31. What is your
profit (or loss)?
{Enter your answer in dollars with 2 decimals, but do not use the "$". Enter a loss with a
negative sign. For example, if the profit/loss is -123.45, enter-123.45 with the negative sign
for your answer. }

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