Suppose a financial manager buys call options on 35,000 barrels of oil with the same exercise price
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Suppose a financial manager buys call options on 35,000 barrels of oil with the same exercise price of £120 per barrel. She simultaneously sells a put option on 35,000 barrels of oil with the same exercise price of £120 per barrel. Consider her gains and losses if oil prices are £115, £120, £125, £130 and £135. What do you notice about the payoff profile?
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Related Book For 
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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