Question: Using options with strike price K3 = 22.50, draw the profit diagram for a long call, a short stock, and a short put position for options with the same strike and maturity date. What other investment has this profit diagram?
The next eleven questions are based on the following data for a fictitiously named company, OOPS.
· Current stock price S is $22.
· Time to maturity T is six months.
· Continuously compounded, risk-free interest rate r is 5 percent per year.
· European options prices are given in the following table:
