HW10_sol - Buy one Dec 55 strike call at $3.10 Buy one Dec...

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Purdue University Krannert School of Business MGMT 411: INVESTMENTS Assignment #10, Solution Example: Stock is trading at $55 Outlook: You anticipate a big move either up or down over the next 10 days. Possible strategy: Buy a Straddle
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Unformatted text preview: Buy one Dec 55 strike call at $3.10 Buy one Dec 55 strike put at $3.05 Suppose that these are possible outcomes at expiration: Stock Price in December Long 55 Call - Cost Long 55 Put - Cost Net Profit 45-310 695 385 50-310 195-115 55-310-305-615 60 190-305-115 65 690-305 385...
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This note was uploaded on 02/06/2012 for the course MGMT 411 taught by Professor Clarke during the Spring '09 term at Purdue University-West Lafayette.

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