Suppose a put option has X=103 and Premium=8. As a seller of the put, what is the minimum profit/loss? Suppose you want to establish a bullish spread strategy. The are two call options. The first one has X1=$50 and C1=$5. The second one has X2=$42 and C2=$6.When the underlying asset price is S(t)=$45, what is the profit from the strategy?What is the maximum profit of the strategy?What is the minimum payoff of the strategy?|

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Suppose a put option has X-103 and Premium=8. As a seller of the put, what is the minimum profit/loss?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter8: Financial Options And Applications In Corporate Finance

Section: Chapter Questions

Problem 3P

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Question

Suppose a put option has X=103 and Premium=8. As a seller of the put, what is the minimum profit/loss?

Suppose you want to establish a bullish spread strategy. The are two call options. The first one has X1=$50 and C1=$5. The second one has X2=$42 and C2=$6.
When the underlying asset price is S(t)=$45, what is the profit from the strategy?
What is the maximum profit of the strategy?
What is the minimum payoff of the strategy?|

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