Question
If you own 1 unit of stock and you are afraid of downside risk, you should buy a put option (protective put). Suppose you buy
If you own 1 unit of stock and you are afraid of downside risk, you should buy a put option (protective put). Suppose you buy a put with strike $80 at a price of $10. What will be the value of your portfolio, net of the cost of the option, if the price end up at 95?
- A.$85
- B.$110
- C.$95
- D.$100
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Entrepreneurial Finance
Authors: J . chris leach, Ronald w. melicher
4th edition
538478152, 978-0538478151
