Given the following information, what is the net payoff of a…

Given the following information, what is the net payoff of a synthetic long forward at expiration? Strike price of call and put: $60 Stock price at expiration: $55 Premium paid for call: $2 Premium received for put: $1 Recall, a synthetic long forward is a long position in a call and a short position in an otherwise identical put.

Given the following information, what is the net payoff of a…

Given the following information, what is the net payoff of a synthetic long forward at expiration? Strike price of call and put: $120 Stock price at expiration: $125 Premium paid for call: $6 Premium received for put: $5 Recall, a synthetic long forward is a long position in a call and a short position in an otherwise identical put.

Investors are convinced that, next year, the price of a stoc…

Investors are convinced that, next year, the price of a stock will either go up or down; they disagree on the volatility of the price. The current spot price is $69.00 and volatility will either be high or low. If volatility is high, the price will either increase or decrease by $18.75. If volatility is low, the price will either increase or decrease by $5.00. If the increase or decrease in the price can occur with equal probability, how much more is an at-the-money put expected to (gross) payoff when volatility is high rather than low?