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12) (6 pts) Suppose you own 100 shares of Microsoft that you purchased last March for $85, today Dec. 10th) they are trading at $105.

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12) (6 pts) Suppose you own 100 shares of Microsoft that you purchased last March for $85, today Dec. 10th) they are trading at $105. You are wanting to wait until March of 2019 to sell your shares and you buy one put option contract with an exercise price of 97.50 and a March expiration. The cost is $2.00 per option ($200 per contract). 2019 What would be your return if Microsoft stock price drops to $70 in March of 2019? How did the protective put help you? a) What would be your return if Microsoft stock price increases to $132? What is the "downside" of the protective put? b)

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