Apple currently trades at $433.

1.You can buy a 3-month put option on Apple stock with a strike price of $428 for $24.8. How much do you have to pay to establish a protective put position for a single unit?

2.In reality, you cannot buy a single option, only an option contract. According to the CBOE website, how many shares of the underlying stock are covered by 1 option contract for equity options?

3.From now on, assume you bought 1 put option contract (and no stocks). What is your option payoff at expiration if the stock price has risen to $435?

4.What is your option payoff at expiration if the stock price has fallen to $424?

5.Ignoring the time value of money, what is your total profit with a stock price of $424?

6.What is your total profit if you consider the time value of money? The risk-free rate is 0.007 (EAR).