Question: Consider: (a) Stock trades for $100; (b) Calls with exercise prices of $110 trade at prices of $6.40; (c) Puts with exercise prices of $90

Consider:

(a) Stock trades for $100;

(b) Calls with exercise prices of $110 trade at prices of $6.40;

(c) Puts with exercise prices of $90 trade at prices of $3.63.

If a person buys a $110 call and a $90 put, what is her higher break-even point? The answer is 120.03, how do you solve this?

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