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2. Suppose you write an european put option? priced H = 4, at a strike price K = 50. Morover, the contract is valid for ID securities. Draw approxim

Hello, I'm stuck with these 2 exercises about options that I have to solve. Is there anyone who can help me? An explanation would be appreciated.


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Thanks in advance!

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2. Suppose you write an european put option? priced H = 4, at a strike price
K = 50. Morover, the contract is valid for ID securities. Draw approxim—
ately your payoff at T. What is the maximum loss? What about the gain?
Consider r = CI. 3. You want to go speculative on a certain stock 5. Your available wealth is
W = 'If'j ODD euros. The current price SE 2 4D euros while the call option
Ct vnritten on the same underlyingJ with a strike price K = 43? costs 4. In
the case in which you can just chose one of the two instruments, what are
your alternative investment strategies? Describe the return profile of the
strategies in the case in which 331 = 45. What if instead the price 3; was
48? Consider r = U.

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