80. Daimler (DAI) is the parent company responsible for manufacturing Mercedes Benz automobiles. You have a friend who works at DAI and she told you - in the strictest of confidence - that they have just discovered a serious defect in airbags installed in all Mercedes since 2018. They will soon announce a product recall to fix the faulty airbags. Once this is announced, DAI share price is likely to fall sharply. You believe that in the near future, DAI share price will fall to around EUR 65. Required: a) If you had to choose between the Dec-21 put options with strikes of EUR 70 and EUR 80, which would you choose? Briefly explain the rationale for your choice. b) Both the Dec-21 EUR 90 and Jun-22 EUR 90 put options are viable positions. Briefly discuss the advantages and disadvantages of each for the purpose of your speculation. Ex Price Last Sale Series PUT OPTIONS Daimler AG Dec 21 Dec 21 Dec 21 Dec 21 Last Sale Price EUR 80 60 1.77 70 5.60 80 9.21 90 15.43 Jun 22 Jun 22 Jun 22 Jun 22 60 5.90 70 10.10 80 15.30 90 21.50 On 17 November 2021, Daimler AG share price is trading at EUR 80. Daimler (DAI) is the parent company responsible for manufacturing Mercedes Benz automobiles. You have a friend who works at DAI and she told you - in the strictest of confidence - that they have just discovered a serious defect in airbags installed in all Mercedes since 2018. They will soon announce a product recall to fix the faulty airbags. Once this is announced, DAI share price is likely to fall sharply. You believe that in the near future, DAI share price will fall to around EUR 65