Question: Payoff does not include premiums. Profit includes premiums. For this problem, determine payoff max(s-k,0) without needing to know or given any premiums Problem 2. Consider

Payoff does not include premiums. Profit includes premiums. For this problem, determine payoff max(s-k,0) without needing to know or given any premiums

Problem 2. Consider two contracts A and B. A: Long 1 call option with 90-dollar strike price, short 2 call options with 100-dollar strike price, long 1 call option with 110-dollar strike price. B: Long 1 put option with 90-dollar strike price, short 2 put options with 100-dollar strike price, long 1 put option with 110-dollar strike price. All options are for 1 share of the same stock. Let S be the stock price at the expiration date. Let Ag2 and Bg2 be the payoffs for contract A and B, respectively, if S is 92 dollars. Let A102 and B102 be the payoffs for contract A and B, respectively, if S is 102 dollars. Calculate Ag2 - B92 + 2A102 - B102). Problem 2. Consider two contracts A and B. A: Long 1 call option with 90-dollar strike price, short 2 call options with 100-dollar strike price, long 1 call option with 110-dollar strike price. B: Long 1 put option with 90-dollar strike price, short 2 put options with 100-dollar strike price, long 1 put option with 110-dollar strike price. All options are for 1 share of the same stock. Let S be the stock price at the expiration date. Let Ag2 and Bg2 be the payoffs for contract A and B, respectively, if S is 92 dollars. Let A102 and B102 be the payoffs for contract A and B, respectively, if S is 102 dollars. Calculate Ag2 - B92 + 2A102 - B102)

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