1. An investor owns 10,000 shares of IBM stock, which is currently trading at $100 per share. She decides to buy 100 put option with a strike price of $90 at a price of $4, so the total cost is $40,000.

If IBM stock decreases from $100 to $80, What is the profit associated with the protective put buying strategy?

2.

You consider buying a straddle, the strike price is X=$80, the price of the call option is $7, the price of the put option is 5, your net profit is negative if the stock price at maturity is

	A.	$68
	B.	stock price>$92
	C.	stock price<$68
	D.	$73