Suppose that you buy the S&R index for $1000, buy a 1000-strike put, and borrow $980.39. Perform
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Suppose that you buy the S&R index for $1000, buy a 1000-strike put, and borrow $980.39. Perform a payoff and profit calculation mimicking Table 3.1. Graph the resulting payoff and profit diagrams for the combined position.
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This question is a direct application of the PutCallParity equation 31 of the t...View the full answer
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