What is the breakeven stock price

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Reference no: EM131990245

A one-year call option on a stock with strike price of $45 costs $5 and a one-year put option on a stock with strike price of $35 costs $3. Suppose that a trader short two put options and short one call option.

a. What is the breakeven stock price, above which the trader makes a profit?

b. What is the breakeven stock price, below which the trader makes a profit?

Please show work and explain in detail

Reference no: EM131990245

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