A One-Year Call Option on a Stock with a Strike

question 8

Short Answer

A one-year call option on a stock with a strike price of $30 costs $3. A one-year put option on the stock with a strike price of $30 costs $4. Suppose that a trader buys two call options and one put option.
i) What is the breakeven stock price, above which the trader makes a profit?
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ii) What is the breakeven stock price, below which the trader makes a profit?
_ _ _ _ _ _

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