You own a put option on Ford stock with a strike price of $8. The option will
Question:
You own a put option on Ford stock with a strike price of $8. The option will expire in exactly six months.
a. If the stock is trading at $2 in six months, what will be the payoff of the put?
b. If the stock is trading at $21 in six months, what will be the payoff of the put?
c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration.
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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