The common stock of the C.A.L.L. Corporation has been trading in a n\R

Answer: 
a) selling a call option to put in order to get a premium income 
b) ${\displaystyle \mathrm{\$}7+\mathrm{\$}4=\mathrm{\$}11}$ 
c) The net cost of establishing the position ${\displaystyle =\mathrm{\$}50}$ 
Explanation: 
Given data: 
stock price ${\displaystyle =\mathrm{\$}50}$ 
Exercise price ${\displaystyle =\mathrm{\$}50}$ 
price of put option ${\displaystyle =\mathrm{\$}4}$ 
price of call option ${\displaystyle =\mathrm{\$}7}$ 
A) A simple option strategy would be selling a call option to put in order to get a premium income 
b) The most money that can be made ${\displaystyle =\mathrm{\$}7+\mathrm{\$}4=\mathrm{\$}11}$ 
c) create a position that involves a put, a call and riskless lending 
The net cost of establishing the position ${\displaystyle =\mathrm{\$}50}$ 
$\begin{array}{|cccc|}\hline Position& Initialoutlay& StockExerciseprice& \\ Longcall& Callprice=\$7& 0& (\$50-Stockprice)\\ Shortput& Putprice=\$4& \left(\$50Stockprice\right)& 0\\ Lending& \frac{50}{(1+\text{rate of return}{)}^{\frac{1}{4}}}& \$50& \$50\\ Total& \$7-\$4+\frac{50}{(1+\text{rate of return})}& Stockprice& Stockprice\\ \hline\end{array}$

Step 1
a) Formula: $C=P+S_0-\frac{X}{(19r{)}^T}$
C= Call option price
P=Put option price
$S_0$=Stock price
X=Exercise price
r= Risk-free rate
T= Time period
Step 2
C=$4+$50-$\frac{\$50}{(1+10\mathrm{\%}{)}^{\frac{3}{12}}}$
=$4+$50-$48.82
=$5.18
Step 3
b) Options are derivatives dependent on the valuation of underlying financial assets such as stocks. A contract for options allows the holder to purchase or sell the underlying asset, depending on the kind of deed they possess.
Step 4
Contrary to the future, if they prefer not, the holder must not purchase or sell the land. A call option allows the holder within a defined time span, the holder may buy the asset at a specified price. Put Options enable the holder to trade the resource within such a specified time period at a specified price.
Step 5
The technique of simple options is the sale of a straddle. Call for $5.18+$4=$9.18 to produce premium revenue.
Step 6
c) $\begin{array}{|cccc|}\hline Position& Initialoutlay& Stock<Exerciseprice& Stockprice>Exerciseprice\\ Longcall& Callprice=\$7& 0& (\$50-Stockprice)\\ Shortput& Putprice=\$4& (\$50Stockprice)& 0\\ Lending& \frac{50}{(1+\text{rate of return}{)}^{\frac{1}{4}}}& \$50& \$50\\ Total& \$7-\$4+\frac{50}{(1+\text{rate of return})}& Stockprice& Stockprice\\ \hline\end{array}$
The net cost of positioning now is $50.