What is the net profit of this portfolio

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Reference no: EM132032106

An investor has a portfolio consisting of the following assets and instruments.

- A long-call option with K = $40 and a call premium of $3 ata the time of purchase.

- A short-put option with K = $45 and a put premium of $4 at the time of purchase.

- Two short-call options with K = $35 and a call premium of $5 at the time of purchase.

- Two short-stock positions that cost $40 per share at the time of purchase.

Assume that each of these contracts has the same expiration date, and ignore the time value of money. If the stock price at expiration is ST = $60, what is the net profit of this portfolio?

Reference no: EM132032106

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