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Answer:
Since both call and put premiums have been boughtm they are foregone costs. Hence total premium = 0.02 + 0.01 =0.03
BEPcall = strike price + premium paid;
= 1.15 + 0.03 = 1.18
BEPput = strike price - premium paid.
1.05 - 0,03 = 1.02
Question 14 Mark buys Call and Put options with different strike prices. Please read the following...
Mark buys Call and Put options with different strike prices. Please read the following information. Call option premium: $0.02/€ Put option premium: $0.01/€ Call option strike price: $1.15/€ Put option strike price: $1.05/€ Option contract size: €50,000 Break-even points for Mark are _______. a. None of the above b. $1.02/€ and $1.18/€ c. $1.08/€ and $1.12/€ d. $1.06/€ and $1.16/€
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