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Both a call and a put currently are traded on stock XYZ; both have strike prices...

Both a call and a put currently are traded on stock XYZ; both have strike prices of $54 and maturities of six months.


a.

What will be the profit/loss to an investor who buys the call for $4.40 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)


Stock Price       Profit/Loss
  a. $44          $   
  b. 49            
  c. 54            
  d. 59            
  e. 64            


b.

What will be the profit/loss in each scenario to an investor who buys the put for $6.40? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)


Stock Price      Profit/Loss
  a. $44         

$   
  b. 49            
  c. 54            
  d. 59            
  e. 64            

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Expert Solution

jeff jeffy answered 1 year ago
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