Question: Problem 2-29 Both a call and a put currently are traded on stock XYZ; both have strike prices of $54 and maturities of six months.

Problem 2-29

Both a call and a put currently are traded on stock XYZ; both have strike prices of $54 and maturities of six months.

a.

What will be the profit/loss to an investor who buys the call for $4.40 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Stock Price Profit/Loss
a. $44 $
b. 49
c. 54
d. 59
e. 64

b.

What will be the profit/loss in each scenario to an investor who buys the put for $6.40? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Stock Price Profit/Loss
a. $44

$

b. 49
c. 54
d. 59
e. 64

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