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Option combinations (S21-2) Suppose you buy a one-year European call option on share of a...

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Accounting

Option combinations (S21-2) Suppose you buy a one-year European call option on share of a company with an exercise price of $100 and sell a one-year European put option with the same exercise price. The current share price is $120, and the interest rate is 6%. Draw a payoff diagram showing the payoffs from your investments, and compute how much the combined position will cost you.

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