Final answer:
The payoff of the student's combined portfolio investment is $0.50, given that both the call and put options have a strike price of $15, and the initial outlay is $14.50.
Step-by-step explanation:
The student has made a combined transaction that involves buying a share of stock, writing a one-year call option, and purchasing a one-year put option, all with a strike price (X) of $15. To determine the payoff of this portfolio, one would need to consider the end-of-year stock price.
If the stock price is above $15, the call option will be exercised, and the student will sell the stock at $15. If the stock price is below $15, the put option will be exercised, and the student will sell the stock at $15.
In either scenario, the student sells for $15, so the payoff, excluding the cost of the portfolio, is always $15. Since the net outlay for the portfolio is $14.50, the net payoff will be $15 - $14.50, which equals $0.50.