Question
An investor sells a one-year European-style put option on the same stock. The strike is $110, and the premium is $15. Complete the following payoff
An investor sells a one-year European-style put option on the same stock.
The strike is $110, and the premium is $15.
Complete the following payoff table from the short put position.
Spot price at Payoff, excluding Payoff, including
time 1 (S1) premium premium
$90 - $20 -$5
$95 __________ ___________
$100 __________ ___________
$105 __________ ___________
$110 __________ ___________
$115 __________ ___________
$120 __________ ___________
$125 $0 + $15
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Education Finance Specialist II
Authors: National Learning Corporation
1st Edition
0837347432, 978-0837347431
