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for a certain stock, investor a purchases a 45-strike call option while investor b purchases a 135-strike put option. if the final stock price at expiration is s, investor a's payoff will be 12. investor b's payoff at expiration is 78.
Payoff refers to a payment made to a beneficiary. It is an English phrase that can be used to refer to both the salary payment as well as the payback of a debt, like a mortgage. The statement that comes following a brand name is known as the pay-off, pay-off line. The pay-off can be utilized to succinctly and clearly express what the brand stands for, particularly when brand names lack descriptive language. A pay-off is utilized to give a brand name additional emotion or connotations. This contrasts with a catchphrase that primarily seeks to define an activity, such as "receiving 3 means paying 2."
For a certain stock, Investor A purchases a 45-strike call option while Investor B purchases a 135-strike put option. Both options are European with the same expiration date. Assume that there are no transaction costs. If the final stock price at expiration is S, Investor A's payoff will be 12. Calculate Investor B's payoff at expiration, if the final stock price is S.
(A) 0 (B) 12 (C) 36 (D) 57 (E) 78
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