Suppose that you buy for 54 dollars a share of stock. In order to hedge your investment, you decide to also buy 2 put options and sell 1 call option on the same stock. Each put costs 6 dollars and has a strike price of 45 dollars. The call costs 6 dollars, and has a strike price of 59 dollars. 

Find (if it exists) the maximum possible profit for your portfolio on the exercise date. If there is no maximum, then write "None" for your answer. (Note: your portfolio contains options and a share of stock.)

Answer rating: 100% (QA)

To determine the maximum possible profit for the portfolio on the exercise date we need to consider ... View the full answer