Assume the same underlying stock, same time to expiration, and same strike price for all derivatives in

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Assume the same underlying stock, same time to expiration, and same strike price for all derivatives in this problem.

Which of the following must have the same profit as a floor coupled with a cap? Give your reasoning.

(A) Long stock

(B) Short stock

(D) Short straddle

(E) None of the above

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Derivative Pricing

ISBN: 9780367734213

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Authors: Ambrose Lo

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Question Posted: Nov 22, 2023 08:16 AM

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Assume the same underlying stock, same time to expiration, and same strike price for all derivatives in

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C You can combine the payoff diagrams of a floor and cap and see that the ...View the full answer

Derivative Pricing

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