A strategy consists of longing a put on the market index with a strike of 820...
A strategy consists of longing a put on the market index with a
strike of 820 and shorting a call option on
the market index with a strike price of 820. The put premium is
$16.25 and the call premium is $40.43.
Interest rate is 0.5% per month. What is the breakeven price of the
market index for this strategy at
expiration (in 6 months)?
A. $844.18
B. $795.82
C. $844.91
D. $795.08
Homework Answers
A. $844.18
Break even price of market index for above strategy i.e Long Put and Short Call at same strike price on same underlying assets.
putting the values
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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A strategy consists of longing a put on the market index with a
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