A collar is established by buying a share of stock for $58, buying a six-month put option with exercise price $50, and writing a six- month call option with exercise price $66. Based on the volatility of the stock, you calculate that for an exercise price of $50 and maturity of six months, M(dy) = 0.7506, whereas for the exercise price of $66, Md₁) = 0.6549.
Required: What will be the gain or loss on the collar if the stock price increases by $1? (Input the amount as a positive value. Do not round intermediate calculations and round your answer to 3 decimal places.)
Gain of .
