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An investor with $2,000 to invest feels that a stock price will decrease over the next two months. The current stock price is $20 and
An investor with $2,000 to invest feels that a stock price will decrease over the next two months. The current stock price is $20 and the price of a 2-month put option with a strike price of $18 is $1. If the investor chooses to invest all money in put options, what is the profit or loss if the stock price is $30 or $10 two months later?
$-26,000 and $14,000
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$-2,000 and $14,000
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$-24,000 and $16,000
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$-2,000 and $16,000 |
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