Risk-free rate-what is your total dollar profit

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Reference no: EM131184983

Assume the risk-free rate is 0%. What is your total dollar profit (loss) if you buy a 50 December put contract on XYZ, Inc., quoted at $2.15 AND buy a 49 December call contract on XYZ, Inc. at $3.50 and the ending price of XYZ is:

a. $28

b. $38

c. $48

d. $58

e. $68

Hint: It is easiest to compute each option’s profit or loss and then add them together.

Reference no: EM131184983

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