(16) Suppose you own 100 shares of stock RRR, priced at $75. You want to protect against a price decline between now and mid-December. You plan to hedge with an OPTION, having a Strike Price = 70 and a (per share) option price of $4.00. (Think in terms of the real position, the option, and overall outcomes in December.) Answers should be in term of $$ for the 100 share position.

a) Specify the option position, and Draw / Label the 3 or 4 relevant "final graphs", .

b) On the graphs, CLEARLY specify the $ outcomes if the RRR stock price is $52, 72, 92 when the option expires in December.