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Assume you have shorted a put option on Ford stock with a strike price of $9. The option will expire in exactly six months. a.

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Assume you have shorted a put option on Ford stock with a strike price of $9. The option will expire in exactly six months. a. If the stock is trading at $2 in six months, what will you owe? b. If the stock is trading at $19 in six months, what will you owe? c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration. a. If the stock is trading at $2 in six months, what will you owe? If the stock is trading at $2 in six months, you will owe $ 7. (Round to the nearest dollar.) b. If the stock is trading at $19 in six months, what will you owe? If the stock is trading at $19 in six months, you will owe $ (Round to the nearest dollar.) c. Draw a payoff diagram showing the amount you owe at expiration as function of the stock price at expiration. Which of the graphs below best represents the payoff diagram showing the amount you owe? (Select the best choice below.) showing the amount you owe at expiration as a function of the stock price at expiration. - Dest represents the payon diagram snowing the amount you owe? (Select the best choice Delow.) Q Q Cash Flow (5) 24 20 16 12 8 8 4- 0 4 . Cash Flow (S) 5 10 1 10 15 20 25 30 35 40 45 50 55 60 5 10 15 20 25 30 35 40 45 50 55 60 -12 -16 -20- -12 -16 -20 Stock Price (S) Stock Price ($) a 249 20 183 16 Q 20 16 123 8 Cash Flow (5) 5 10 15 20 25 30 35 40 45 50 ss bo OD Cash Flow ($) 0 10 15 20 25 30 35 40 45 50 55 60 -12 -16 204 -8- -12 -16 -20 Stock Price ($) SIAP Drina It Mla

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