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. (20 pts) Stacey believes that Microsoft is overvalued at S=$10. She believes it will decrease in the next year and has $10,000 in
. (20 pts) Stacey believes that Microsoft is overvalued at S=$10. She believes it will decrease in the next year and has $10,000 in her trading account. She decides to buy 1 put option where K = $8, T = 1, and S = $10. The premium on this put option is $0.40. What would be the final profit? (1) What is the strike price of this example? (2) What is the security price of this example? (3) What is the maximum that Stacy can lose of this example? (4) What would be the final profit?
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A Pathway To Introductory Statistics
Authors: Jay Lehmann
1st Edition
0134107179, 978-0134107172
