9. Derivatives | Three CALL options on a stock have the same expiration date and strike...

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9. Derivatives | Three CALL options on a stock have the same expiration date and strike prices of $50, $55, and $60. The mark

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Answer 1

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Largest Profit is 4

A C E G 1 Stock One Call 50 payoff 2 Calls 55 payoff 1 Call 60 payoff Total payoff Total Profit 0 0 0 0 0 -1 3 10 0 0 0 0 -1

A. C. D Е F 1 Stock One Call 50 payoff 2 Calls 55 payoff 1 Call 60 payoff Total payoff Total Profit 2 0 =MAX(A2-50,0) -2*MAX(

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Answer 2

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