Calculate the investor payoff at expiration

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Reference no: EM131959056

Nine months ago, the price of a share of Walt Disney Company (DIS) stock was $95, the price of a nine-month European put option on the DIS stock with a strike price of $90 was $8, and the price of a nine-month European call option on the DIS stock with a strike price of $130 was $35. Suppose that an investor bought 100 shares, shorted 100 call options, and bought 100 put options at that time. Now, at expiration, the price of a share of DIS stock is $147. The risk-free rate is 2% EAR. Calculate the investor’s payoff at expiration, as well as his profit/loss

Reference no: EM131959056

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