Question
A trader invests in Facebook by buying 1000 shares in June for $27 per share. She also buys 1000 put options for $5 each as
A trader invests in Facebook by buying 1000 shares in June for $27 per share. She also buys 1000 put options for $5 each as insurance in case the stock drops sharply. The
put options have a strike price of $27 and a maturity date of December. What is the gain or loss if the spot price on December is: a) $20, b) $27, c) $32 and d) $37? ($5,000 loss, $5,000 loss, $0, $5,000 gain)
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ANSWER a 20 Loss from shares 1000 x 2027 7000 profit from put option 1000 x 75 ...
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Data Analysis And Decision Making
Authors: Christian Albright, Wayne Winston, Christopher Zappe
4th Edition
538476125, 978-0538476126
