Calculate the net-profit for the investor

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Reference no: EM133306296

Question

An investor is considering a straddle strategy to invest in one non-dividend paying stock with a current price of $406.91. The relevant interest is 5% annual. The market price of a European call option on one stock with a strike of $405, and maturity January 2023, is $9.75. The market price of a European put option on one stock with a strike of $405, and maturity January 2023, is $8.50.

Calculate the net-profit for the investor if the stock price at the option maturity is $421.15.

Reference no: EM133306296

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