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Corporate Finance · End Term · 22 Dec 2024 · September 2024 term · Set QDB3

Question 33: You purchase a one-year call option with a strike price …

Question 33

+4 marksNumerical answer

You purchase a one-year call option with a strike price of Rs 20 and a one-year put option with a strike price of Rs 20. The call premium is Rs 1, and the put premium is Rs 2. The current share price is Rs 19. If one year later, the share price decreases to Rs 15, then how much profit you earn (in Rs)?
**Note:**The answer is a single digit integer between 0-9.

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Correct answer: 2

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Question 33 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 22 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB3 22 Dec 2024). It carries 4 marks.

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