An investor has the following position on options of ONGC.
(i) Long one call option with a premium of Rs. 25 per stock at an exercise price of Rs. 400.
(ii) Long one put option with a premium of Rs. 5 per stock at an exercise price of Rs. 300.
The prevailing market price of the ONGC is Rs. 350. Options are European options with expiration
period of 3 months.
You are required to find out the profit or loss to the investor in the following market situations :
(i) At expiration if the price of the ONGC remained at present level.
(ii) At expiration if the price of the ONGC rises to Rs. 500.
(iii) At expiration if the price of the ONGC falls to Rs. 250.
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