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Draw the profit diagrams at maturity for the following portfolios consisting of options. Clearly label all the important points in the diagrams.

A. Sell a one-year European call option with a strike of $53 and buy a one-year European put option with a strike of $47. The call option is trading at $2 and the put option is trading at $3

B. Execute the transactions in part (a) but now also buy the underlying stock trading at $50.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91418941

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