Question: each one should have the matrix shown above and in the textbook. Every section should include all formulas shown and the answers clearly indicated you
- each one should have the matrix shown above and in the textbook.
- Every section should include all formulas shown and the answers clearly indicated
- you need to tell me why an investor would use the given strategy.
Construct a collar strategy.
Your put option should be 2-3 strikes below the current market price, and your call should be 2-3 strikes above the current market price. Ideally, the protection window should not be more than $20. Remember that this is a married strategy. See the discussion in the textbook if you are unsure about this. Calculate the net premium, the break-even point, the max profit, and the max loss for the strategy.Each of these four items must be clearly displayed.
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