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# der_p3_sol-1 - Derivative Strategy 1 Name A strategy...

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Derivative Strategy Name 1. A strategy consists of buying a market index product at \$830 and longing a put on the index with a strike of \$830. If the put premium is \$18.00 and interest rates are 0.5% per month, what is the profit or loss at expiration (in 6 months) if the market index is \$810? A. \$20.00 gain B. \$18.65 gain C. \$36.29 loss D. \$43.76 loss 2. A strategy consists of buying a market index product at \$830 and longing a put on the index with a strike of \$830. If the put premium is \$18.00 and interest rates are 0.5% per month, compute the profit or loss from the long put position by itself (in 6 months) if the market index is \$810. 3. A strategy consists of buying a market index product at \$830 and longing a put on the index with a strike of \$830. If the put premium is \$18.00 and interest rates are 0.5% per month, what is the estimated price of a call option with an exercise price of \$830? 4. A strategy consists of longing a put on the market index with a strike of 830 and shorting a call option on the market index with a strike price of 830. The put premium is \$18.00 and the call premium is \$44.00. Interest rates are 0.5% per month. Determine the net profit or loss if the index price at expiration is \$830 (in 6 months).

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der_p3_sol-1 - Derivative Strategy 1 Name A strategy...

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