A put option in finance allows you to sell a share of stock at a given price in the future, There are different types of put options. A European put option allows you to sell a share of stock at a given pnce, called the exerose price, at a particular point in time after the purchase of the option. For example, suppose you purchase a sax-month European put option for a share of stock with an exercise price of $76. If six months later, the stock price per share is $26 or more, the option has no value. If in six months the stock price is lower than $26 per share, then you can purchase the stock and immedately seil it at the higher exercise price of $26,1f the price per share in six months $2250, you can purchase a share of the stock for $22.50 and then use the put option to immediately sell the share for $26. Your profit would be the difference, $26 572.50$3.50 per thare, less the cost of the option, If you paid $1.00 per put option, then your profit would be $3.50 - $1.00=$2.50 per share, The poent of purchasing a. European option is to limt the fisk of a decrease in the per-share price of the stock. Suppose you purchased 200 shares of the stock at $28 per share and 80 six-month European put options with an exerche price of 526 . Each put optich costs $1. (a) Using data tables, construct a model that shows the value of the portfolio with options and wathout options for a share price in sox months between 520 and $29 per share in increments of 51.00 . What is the benefit of the put options on the portfolio value for the different share prices? for subtractive or negative numbers use a mirius sign even if there is a + sign before the blank ( xariples -300). If yeu inswer is zero, enter "0". A put option in finance allows you to sell a share of stock at a given price in the future. There are different types of put options. A European put option allows you to sell a share of stock at a given price, called the exercise price, at a particular point in tirne after the purchase of the option. For example, suppose you purchase a sox month European put option for a share of stock with an exercise price of $26. If six months later, the stock price per share is $26 or more, the option has no value. If in six months the stock pnce is lower than $26 per share, then you can purchase the stock and immediately sell it at the higher exercise price of $26. If the price per share in soc months is $22.50, you can purchase a share of the stock for $22.50 and then use the put option to immediately sell the share for $26. Your profit would be the difference, $26 $22.50=$3.50 per share, less the cose of the option. If you paid $1.00 per put option, then your profit would be $3.50$1.00$2.50 per share. The point of purchasing a European option is to limit the risk of a decrease in the per-share price of the stock. Suppose you purchased 200 shares of the stock at $28 per share and 80 sax-month European put options with an exerase price of $26. Each put option costs $1. (a) Using data tables, construct a model that shows the value of the portfolio with options and without options for a share price in six months between $20 and $29 per share in increments of $1.00. What is the benefit of the put options on the portfolio value for the different share prices? for subtractive or negative numbers use a minus sign even if there is a + sign before the blank (Exarnple: -300). If you answer is zero, enter "0", (b) Discuss the value of the portfolo with and without the furopean put options. The lower the stock vrice, the beneficial the put options. The options are worth nothang at a stock price of 1 There is a benefit from the put options to the overall portfolio for stock prices of 1 or A put option in finance allows you to sell o share of stock at a given price in the future. There are different types of put options. A European put option allows you to sell a share of stock at a given price, colled the exercise price, at a particulor point in time after the purchase of the option, For example, suppose you purchase a six-month Eurppean put optoon for a share of stock with an exercise price of $26. If six months later, the stock price per share is $26 or more, the option has no value. If in six months the stock price is lower than $26 per share, then you can purchase the stock and immediately sell it at the higher exercise price of $26.11 the price per share in six months is $22.50, you can purchase a share of the stockfor $22.50 and then use the put option to immediately self the share for $26. Your profit would be the difference, $26 $22.50=$3.50 per share, less the cost of the option. Uf you paid $1.00 per put option, then your profit would be $3.50$1,00=$2.50 per share. The point of purchasing a European ogtion is to limit the risk of a decrease in the per-share price of the stock. Suppose you purchased 200 shares of the stock at 528 per share and 80 six-month European put options with an exercre price of $26. Each put option costs $1. (a) Using data tables, construct a model that shows the value of the portiobo with options and without options for a share price in six months between $20 and $29 per share in increments of $1,00. What is the benefit of the put options on the portiolio value for the different share prices? For subtractive or negative numbers use a minus sugn even if there is a + sign before the blank { txarngle: -300). If you answer is zero, enter "0
