Assume that you have shorted the put option in Problem 8. a. If the stock is trading

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Assume that you have shorted the put option in Problem 8.

a. If the stock is trading at $8 in three months, what will you owe?

b. If the stock is trading at $23 in three months, what will you owe?

c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration.

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Corporate Finance

ISBN: 9780137845071

6th Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Jun 12, 2024 01:15 AM

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Assume that you have shorted the put option in Problem 8. a. If the stock is trading

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Corporate Finance

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