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Consider an investor who purchases a European put option with a strike price of $75 to sell 100 shares of a certain stock. Current stock
Consider an investor who purchases a European put option with a strike price of $75 to sell 100 shares of a certain stock. Current stock price is $68. The expiration date is in three months and the price of an option to sell one share is $6. How much is the initial investment? What is the loss for the investor if the stock price is more than the strike price and the option is not called? What is the gain/loss if the stock price is $65 dollars? What is the gain/loss is the stock price is $74 dollars?
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