Question: 3. Suppose a trader buys a call and a put option on a stock 1with a strike price of $60 and time to maturity of

3. Suppose a trader buys a call and a put option
3. Suppose a trader buys a call and a put option on a stock 1with a strike price of $60 and time to maturity of three months [t=.25]. Suppose that the current stock price of the underiying is also $15!], the annual risk-free rate is 2% and the annual standard deviation ofthe underlying price change is 20%. a] Suppose that the price increases to $50 at maturity. what is the prot or loss of this strategy. h] 1What price does the trader needs the volatility to achieve in order to prot? c] Now if another trader buys a call option with a strike price of $62 and a put option with a strike price of $53 with everything else the same. 1what prioe does the trader needs the volatility to achieve in order to prot

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