Use a table of cash flows to analyze the cash flows and the P/L at expiration...

  

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Use a table of cash flows to analyze the cash flows and the P/L at expiration of the following strategy: Sell short ABC's stock and sell two OCT, 155 puts and purchase two OCT,175 calls. S K call call call put put put $165 $155 $165 $160 $165 $165 JUL AUG OCT JUL AUG OCT $10.5 $11.75 $14 $.1875 $6 $8.125 $11.125 $.75 $2.6875 $5.25 $8.125 $1.50 $2.25 $2.75 $4.50 $2.375 $4.75 $6.75 $165 $170 $165 $175 $.8125 $1.50 $.5125 $6 $.75 $4.50 $5.75 $7.5 $9 $9.75 $10.5 $12 Use a table of cash flows to analyze the cash flows and the P/L at expiration of the following strategy: Sell short ABC's stock and sell two OCT, 155 puts and purchase two OCT,175 calls. S K call call call put put put $165 $155 $165 $160 $165 $165 JUL AUG OCT JUL AUG OCT $10.5 $11.75 $14 $.1875 $6 $8.125 $11.125 $.75 $2.6875 $5.25 $8.125 $1.50 $2.25 $2.75 $4.50 $2.375 $4.75 $6.75 $165 $170 $165 $175 $.8125 $1.50 $.5125 $6 $.75 $4.50 $5.75 $7.5 $9 $9.75 $10.5 $12

Answer rating: 100% (QA)

Cash Flows At expiration if the stock price S is below 155 the investor will have to purchase ABCs s... View the full answer