A stock can be purchased at $40 in April. An investor considers making a spread by selling
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Question:
A stock can be purchased at $40 in April. An investor considers making a spread by selling a May put with strike $30 for $50, buying a May put with strike $40 for $300, buying a May call with strike $40 for $300 and selling a May call with strike 50 for $50.
Write the payoff function of the spread and provide the corresponding diagram.
Related Book For
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
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