Question: Mixing options and securities can often create interesting payoffs. For each of the following combinations, show what the payoff would be when the option expires

Mixing options and securities can often create interesting payoffs. For each of the following combinations, show what the payoff would be when the option expires if (i) the stock price is below the exercise price and (ii) the stock price is above the exercise price. Assume that each option has the same exercise price and expiration date. Consider options with an exercise price of $100. Call the stock price at the expiration date 3. Note that your answer may be a number or may be a relationship to S, such as S+10. Required: a. Buy a call and invest the present value of the exercise price in a bank deposit. b. Buy a share and a put option on the share. c. Buy a share, buy a put option on the share, and sell a call option on the share. (I. Buy a call option and a put option on the share. Complete this question by entering your answers in the Required A Required B Required C Required D Buy a share and a put option on the share. - Value of Asset at Option Expiration Complete this question by entering your answers in the t Required A Required B Required C Required D Buy a share, buy a put option on the share, and sell a call option Value of Asset at Option Expiration S

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