Min Has Created the Following Portfolio $\bullet$ Bought a Share for $20

question 31

Multiple Choice

Min has created the following portfolio:
$\bullet$ bought a share for $20
$\bullet$ bought 3 puts, strike price $18
$\bullet$ maturity 1year
Suppose at expiration S_T is $17.What is the payoff of her strategy?

• A)$0
• B)$3
• C)−$2
• D)−$3

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Definitions:

Libertarians

Libertarians advocate for minimal government intervention in personal and economic affairs, emphasizing individual liberty and voluntary association.

Equal Opportunities

The principle that all individuals should have the same opportunities to advance socially and economically, without facing discrimination or bias.

Negative Income Tax

A taxation framework where individuals earning under a specified threshold get additional compensation from the government rather than contributing tax.

Earned Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and families, designed to encourage and reward work.