Question

A collar is established by buying a share of stock for $53, buying a six-month put option with exercise price $46,

and writing a six-month call option with exercise price $58. Based on the volatility of the stock, you calculate that for an exercise price of $46 and maturity of six months, N(d₁) = 0.7378, whereas for the exercise price of $58, N(d₁) = 0.6572. 

What will be the gain or loss on the collar if the stock price increases by $1? (Input the amount as a positive value. Round your answer to 3 decimal places.)

(Click to select)LossGain of $

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