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5) On 16 May 2015 MCD is trading at $98 per share. The price of a put option on MCD expiring 18 September 2015 is
5) On 16 May 2015 MCD is trading at $98 per share. The price of a put option on MCD expiring 18 September 2015 is $1.80 for options with X = $90 and $3.35 for options with X = $95. a. You think that MCD will fall in price, and you want to speculate. Complete the table and graph the percent profit vs. the stock price at expiration. b. Which strategy is preferrable? Why?
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