Consider the following portfolio: Long 0 puts with strike price 98.0 Short 1 puts with strike price 98.0 Long 0 calls with strike price 100.5 Short 1 calls with strike price 100.5 Complete the following payoff table. What choice corresponds to the last row of the table? Position ST ≤ 98.0 98.0 < ST ≤ 100.5 ST > 100.5                 portfolio

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Consider the following portfolio:

  • Long 0 puts with strike price 98.0
  • Short 1 puts with strike price 98.0
  • Long 0 calls with strike price 100.5
  • Short 1 calls with strike price 100.5

Complete the following payoff table. What choice corresponds to the last row of the table?

Position

ST ≤ 98.0

98.0 < ST ≤ 100.5 ST > 100.5
       
       
portfolio      
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