Financial Risk Manager Part 1

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Explanation:

Let the future asset price be $S_T$ .

Total payoff:

So the portfolio payoff is never less than $3 $and is exactly `$ 3$ when $S_T \le K+3$. Therefore, the payoff must be at least $\ $3.00`$ .

Explanation:

Let the future asset price be $S_T$ .

Total payoff:

So the portfolio payoff is never less than $3 $and is exactly `$ 3$ when $S_T \le K+3$. Therefore, the payoff must be at least $\ $3.00`$ .

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MManit

Last updated: April 18, 2026 at 11:32

The payoff must be less than $\`$ 3.00$; i.e., maximum of $\ $3.00`$

0.0%

The payoff must be at least $\`$ 3.00$; i.e., minimum of $\ $3.00`$

100.0%

The payoff is equal to $\`$ 3.00`$ regardless of the future asset price

We need the current asset price to answer the question