Problem

Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 an...

Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and expirations of 6 months. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in 6 months? What will be the profit in each scenario to an investor who buys the put for $6?

a.    $40

b.    $45

c.    $50

d.    $55

e.   $60

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Solutions For Problems in Chapter 2