Suppose you buy one SPX call option with a strike of 1400 and write one SPX put option with a strike of 1400. What are the payoffs at maturity to this position for S&P 500 Index levels of 1300, 1350, 1400, 1450, and 1500?
Answer to relevant QuestionsSuppose you buy one each SPX call options with strikes of 1300 and 1500 and write two SPX call options with a strike of 1400. What are the payoffs at maturity to this position for S&P 500 Index levels of 1200, 1250, 1300, ...You can also create a butterfly spread using puts by buying a put at K1, buying a put at K3, and selling two puts at K2. All of the puts are on the same stock and have the same expiration date, and the assumption that K2 = ...Repeat Questions 1 and 2 assuming that all three states are equally likely.Given the following information, calculate the expected return and standard deviation for a portfolio that has 45 percent invested in Stock A, 35 percent in Stock B, and the balance in StockC.You have a three-stock portfolio. Stock A has an expected return of 12 percent and a standard deviation of 41 percent, Stock B has an expected return of 16 percent and a standard deviation of 58 percent, and Stock C has an ...
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