The following is the payoff diagram of the trading strategy. Use this diagram and the information...

  

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The following is the payoff diagram of the trading strategy. Use this diagram and the information of option price from the table below to answer the questions. Payoff 90 95 Stock 105 100 price Class Exercise price Option premium Expiration date (year) Call $85 $21.00 1 Put $85 $0.27 1 Call $90 $18.00 1 Put $90 $1.82 1 Call $95 $15.00 1 Put $95 $3.36 0.5 Call $100 $12.00 1 Put $100 $4.91 1 Call $105 $9.40 1 Put $105 $6.85 1 Call $110 $6.00 1 Put $110 $8.00 1 The interest rate is 12% per annum. 5.1 Find the current stock price. 5.2 Determine the cost of the above strategy. 5.3 Write the payoff table or equation of this strategy. 5.4 Calculate the minimum and maximum profits, and break-even stock price(s). The following is the payoff diagram of the trading strategy. Use this diagram and the information of option price from the table below to answer the questions. Payoff 90 95 Stock 105 100 price Class Exercise price Option premium Expiration date (year) Call $85 $21.00 1 Put $85 $0.27 1 Call $90 $18.00 1 Put $90 $1.82 1 Call $95 $15.00 1 Put $95 $3.36 0.5 Call $100 $12.00 1 Put $100 $4.91 1 Call $105 $9.40 1 Put $105 $6.85 1 Call $110 $6.00 1 Put $110 $8.00 1 The interest rate is 12% per annum. 5.1 Find the current stock price. 5.2 Determine the cost of the above strategy. 5.3 Write the payoff table or equation of this strategy. 5.4 Calculate the minimum and maximum profits, and break-even stock price(s).

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Answer To solve this problem we need to use the given information about the option prices and the pa... View the full answer