Question: 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

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 written covered call? Give your reasoning. There can be more than one answer.

(A) Long stock

(B) Short stock

(D) Short forward

(E) Long straddle

(F) Short straddle

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The combination of a floor and a written covered call has a profit profile that is equivalent to a long stock position This is because the floor provi... View full answer

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