Judy buys 1,000 shares of Royal Bank at $105 and immediately buys 10 puts with a strike price of $98 at a cost of $3.00.

a) Explain why Judy would buy this option.

b) Is there any time value in this option?If so, what is it?

c) What is Judy's total return if Royal shares hits $130.

d) What is Judy's total return if Royal shares hit $90.

e) At what share price would Judy breakeven.