Question: c. You wish to create a financial instrument that has a payoff in 6 months' time equal to the maximum value of $2,000 and

c. You wish to create a financial instrument that has a payoff

c. You wish to create a financial instrument that has a payoff in 6 months' time equal to the maximum value of $2,000 and $2,000 + $0.5*(S&P Index in 6 months' time 3,200). The 6-month call and put options with strike price 3,200 is trading at 120 and 110, respectively. What is the cost of your instrument? (9 marks)

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