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

Question 34: An investor purchases one call option and two put option…

Question 34

+4 marksNumerical answer

An investor purchases one call option and two put options with the same strike price of Rs 65 and maturity of three months. The three-month risk-free rate is 4%. The price of the call option is Rs 7, and the price of the put option is Rs 5. What is the maximum loss (in Rs) the investor may incur on her portfolio with this strategy? (Round off to the nearest integer)

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Correct answer: 17 (accepted within ±0.5)

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Question 34 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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