All 4 options are written on the same underlying asset and expire in exactly one year. If the primary asset is worth $35.48 when the options all expire, what is your net percentage return? Correct Answer is :- 0.0526
All 4 options are written on the same underlying asset and expire in exactly one year. If the primary asset is worth $35.48 when the options all expire, what is your net percentage return? Correct Answer is :- 0.0526
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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You buy a call with a strike price of $33 and sell an identical put. The call has a premium of $8.70 and the put has a premium of $5.53. You also sell a call with a strike price of $36 and buy an identical put. This call has a premium of $7.49 and this put has a premium of $7.17. The risk-free rate in the economy is 3.77%. All 4 options are written on the same underlying asset and expire in exactly one year. If the primary asset is worth $35.48 when the options all expire, what is your net percentage return?
Correct Answer is :- 0.0526
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