Question: a. Suppose that Auric insures against a price increase by purchasing a 440-strike call. Verify by drawing a profit diagram that simultaneously selling a 400

a. Suppose that Auric insures against a price increase by purchasing a 440-strike call. Verify by drawing a profit diagram that simultaneously selling a 400 strike put will generate a collar. What is the cost of this collar to Auric?
b. Find the strike prices for a zero-cost collar (buy high-strike call, sell low-strike put) for which the strikes differ by $30.

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