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1. An investor purchases a put option on a BP (British Petroleum) with an exercise price of 50 $. The premium paid is 5 $

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1. An investor purchases a put option on a BP (British Petroleum) with an exercise price of 50 $. The premium paid is 5 $ Calculate the payoff and profit for the option owner if the stocks market price equals 30 $ at expiration. a) What can be the put option (any put option) used for? b) If someone is a hedger (owns the underlying stock) what is his alternative to buying a put option

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