Question: Please write the calculation process, draw a diagram, and explain it. An exotic option, with strike price, K = 60 has a premium of 5.

Please write the calculation process, draw a diagram, and explain it.

  1. An exotic option, with strike price, K = 60 has a premium of 5. The option has a payoff of 0 when ST is 70, -5 when ST = 65 and 5 when ST = 55. Which of the following best describes the option?

  1. Gap call
  2. Compound call on put
  3. Average price Asian put
  4. Gap put
  5. Down-and-in call

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