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1. If a superannuation fund is invested in the shares of Bank A whose shares tradeat USD 16.75 a share, and the fund has purchased

1. If a superannuation fund is invested in the shares of Bank A whose shares tradeat USD 16.75 a share, and the fund has purchased put options on these shares at apremium of USD 0.80 with an exercise price of USD 15 per share, when will the fundexercise its put options?

2.Illustrate the profit/loss profile of the writer and buyer of the put option along withthe breakeven price on a chart.

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