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QUESTION

The market price of XYZ stock has been very steady and you think this situation will continue for a few weeks.

The market price of XYZ stock has been very steady and you think this situation will continue for a few weeks. Thus, you decide to make a one-month call option contract on this stock with a strike price of $50 and an option price of $2.50. You also make a one-month put option contract on this stock with a strike price of $50 and an option price of $1.70. What will be your total profit on these option positions if the stock price is $51 on the day the options expire?

A) −$320

B) $320

C) −$80

D) -$180

E) $420

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