Essay
A put and a call have the following terms:
Call: strike price $50
expiration date six months
Put: strike price $50
expiration date six months
The price of the stock is currently $55. The price of the call and put are, respectively, $9 and $1. What will be the profit from buying the call or buying the put if, after six months, the price of the stock is $40, $50, or $60?
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