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Corporate Finance · End Term · 10 May 2026 · January 2026 term · Set 1

Question 32: A one-year European call option with a strike price of R…

Question 32

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A one-year European call option with a strike price of Rs 80 is selling at a call price of Rs 6. A one-year European put option with a strike price of Rs 80 is selling at a put price of Rs 4. The current share price is Rs 75. One year later, the share price increases to Rs 96. If you purchase two call options and one put option today, then how much profit do you make in one year? (Round off to the nearest integer)

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Correct answer: 16 (accepted within ±0.5)

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Question 32 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 10 May 2026, in the January 2026 term (Corporate Finance 06 May 26). It carries 4 marks.

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