Question: 4. Long/Short underlying position and a Call/Put position: FB is currently priced at $355 and the 137-day K = 340 call and put are priced

4. Long/Short underlying position and a Call/Put position:

FB is currently priced at $355 and the 137-day K = 340 call and put are priced $35 and $19.30, respectively. The annual continously compounded risk-free rate is 1.75%.

a) An investor sells FB short at $355 and buys a 137-day K = 340 call for $35. What is the P/L if NFLX closes at $360 at expiration?

b) An investor buys FB at $355 and buys a 137-day K = 340 put for $19.30. What is the P/L if NFLX closes at $360 at expiration?

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