Mock 2010 Q- 38 - Max profit on Collar

Formula is Higher Strike price - stock price but in this problem they have also deducted difference of premium. Answer should be 150K Be fking consistent CFAI…

They are asking for profit, not payoff.

I know. I am also talking about profit. Check page 425 of cfai book 5

Don’t have the book on me, however, just think of the word profit as it relates to any other thing in life…its what you make minus what you pay. What you make is how I define the payoff. Not the first inconsistency with CFA, but that’s how it goes.

Maybe cos it wasn’t a zero cost collar pup…if it is ZC then you ignore the premiums. Was it so?