Question
For $4.2 you could buy a 5-month put option giving you the right to sell 1 share of Delta Company's stock at a price of
For $4.2 you could buy a 5-month put option giving you the right to sell 1 share of Delta Company's stock at a price of $74.4 per share. Suppose you believe that the stock price is going to decline from its current level of $76.9 sometime during the next 5 months. If you bought this option today and excise the option at the time the stock price drops to $71, what would your holding-period return be?
| a. | -40.48% | |
| b. | 40.48% | |
| c. | 19.05% | |
| d. | -19.05% |
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Financial Management In The Sport Industry
Authors: Matthew T Brown, Daniel Rascher, Mark S Nagel, Chad Mcevoy
1st Edition
1934432040, 978-1934432044
