CALLS PUTS ABC Inc. Exercise Price 130 Nov-20 Dec-20 Jan-21 Nov-20 Dec-20 Jan-21 3.00 4.75 135 140 6.50 4.00 2.25 5.75 3.50 2.00 4.35 3.00 1.75 4.25 5.50 3.75 5.25 6.75 6.50 8.00 Question 3 (12 points) On October 6, 2020 John bought 100 shares of ABC Inc. at $130. He wants though to protect his investment so that by Jan 2021 his investment won't go below $13,000. He is toying with the idea of requesting either a Stop Loss order to protect his downside at that level. Using the options Market to protect this floor ($13,000), what will you recommend John do to protect his investment for the next 3 months. He is willing to pay premium so his initial investment is fully protected What Strategy to you recommend? If the stock goes up to $148, please calculate John's profit and holding period rate of return (HPR) since his purchase including the cost of the option contract he entered ProfitLoss $ HPR%