AAFM CWM_LEVEL_2 Question Answer
Section C (4 Mark)
Suppose an investor Mr. Kishan Raj is holding ABC Ltd. currently trading at Rs. 4758. He decides to establish a collar by writing a Call of strike price Rs. 5000 for Rs. 39 while simultaneously purchasing a Rs. 4700 strike price Put for Rs. 27.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 4948
• If Nifty closes at 4858