ESSENTIALS OF INVESTMENTS>LL<+CONNECT
ESSENTIALS OF INVESTMENTS>LL<+CONNECT
11th Edition
ISBN: 9781264001026
Author: Bodie
Publisher: MCG
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Chapter 15, Problem 10PS

An investor purchases a stock for $ 38 and a put for $ 0. 5 0 with a strike price of $ 35 . The investor sells a call For $ 0. 5 0 with a strike price of $ 4 0 . LO 15 1
a. What is the maximum profit and loss for this position?
b. Draw the profit and loss diagram for this strategy as a function of the Stock price at expiration.

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