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rtal: My x M Inbox (26) _ stor × ezto.mheducation.com/hm.tpx?.-0.5585971909336144-1512607024046 (Minbox (12)-surn xyD07Assignment Recent . Google Problem 15-7 (my version) You establish a straddle on Walmart using September call and put options with a strike price of $35. The call premium is $5.75 and the put premium is $5.00. a. What is the payoff on this position if Walmart is seling for $35 in September? b. What will be your payoff if Walmart is selling for $2625 in September? c. What will be your payoff if Walmart is selling for $38.53 in September? d. What is the cost of this investment strategy? e. What will be your percent return f Walmart is selling $38 53 in Septomber? percent References Worksheet 0 9 8 7 6Explanation / Answer
a.
payoff=-5.75-5=-10.75
b.
payoff=(35-26.25)-5.75-5=-2
c.
payoff=(38.53-35)-5.75-5=-7.22
d.
cost=5+5.75=10.75
e.
return=-7.22/10.75=-67.16%
please check if the value given in question is $38.53 or $38.63, I took $38.53.please change in answer equations if it is $38.63
the above are answers
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