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3. Buy a European put with strike 100 and cost 6.50. The effective interest rate is 4% for 6 months. At what spot price

3. Buy a European put with strike 100 and cost 6.50. The effective interest rate is 4% for 6 months. At what spot price at expiry do we break even? 4. Write the put in (3). What is your profit if S(T) is (a) 120 (b) 110 (c) 100 (d) 90 (e) 80 Find the maximum profit and loss.

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