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An investor buys a stock for $36. At the same time a 6 month put option to sell the stock for $35 is selling for
An investor buys a stock for $36. At the same time a 6 month put option to sell the stock for $35 is selling for $2. a) What is the profit or loss from purchasing the stock if the price of the stock is $30? $35? $40? b) If the investor also purchases the put (ie. Constructs a protective put), what is the combined cash outflow? c) If the investor constructs the protective put, what is the profit or loss if the price of the stock is $30? $35? Or $40 at the put
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