Draw payoff diagrams for each of the portfolios below X
Draw payoff diagrams for each of the portfolios below (X = strike price).
a. Buy a share of stock and short a call with X = $35
b. Buy a risk-free zero-coupon bond with a face value of $35 and sell a put with X = $35.
c. Explain how these payoff diagrams relate to the concept of put-call parity.
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