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An article in the Wall Street Journal discussed put options on Facebook's stock. One put option had a strike price of $25. The article observed:
An article in the Wall Street Journal discussed put options on Facebook's stock. One put option had a strike price of $25. The article observed: "puts are contracts that give the buyer the right to sell stock later for a set price. These particular bets maximize their profit if the stock trades at $25." Do you agree that as an investor you will maximize your investment in a put option with a strike price of $25 if the underlying stock has a market price of $25? Briefly explain.
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