What is the payoff? $25, and buy You buy a share of stock, write a one-year...

Question

Question

$25, and buy You buy a share of stock, write a one-year call option with X= one-year put option with X= $25. Your net outlay What is the payoff?

Answer 1

Answer #1

Payout is final outcome or final cash flow.

You have correctly understood the question and calculated the Risk-free rate.

Call - Put = future.

Payoff = Inflow from future at expiry = $ 25

Answer 2

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