An investor purchases a stock for $53 and a put for $.65 with a strike price of

Question

An investor purchases a stock for $53 and a put for $.65 with a strike price of $49. The investor sells a call for $.65 with a strike price of $60. What is the maximum profit and loss for this position? (Loss amount should be indicated by a minus sign.)

An investor purchases a stock for $53 and a put for $.65 with a strike price of $49. The investor sells a call for $.65 with a strike price of $60. What is the maximum profit and loss for this position? (Loss amount should be indicated by a minus sign.)

Explanation / Answer

Maximum profit => $7 (60 -53)

Maximum Loss => $4 (49- 53)

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