Max Houck hdds 800 shares of Boulder Gas and Light. He bought the stock several years ago at $5265, and the stures are now trading at $79.00 Max is concerned that the market is beginning to soften. He doesn't want to sell the stock, but he would like to be able to protect the profit he's made He decides to hedge his position by buying 8 puts on Bouldet GSL The three month puts carry a strike price of 57900 and are currently trading at $327 1. How much protor ons wil Max make on this doel it the price of Boulder GAL does indeed drop to 56250 a share, by the expiration date on the puts? b. How would be doit the stock kart going up ince and reached $8500 she by the expiration date c What do you see the major advantages of using puts as hedge vehicles? d. World Max have been better ol uning is the money puts-that's, pus with an $27.50 strike price that are trading at $10,31? How about Unirea of the money futs-say, those with a 51200 kce, trading at $100? Explain the price of Border Galdon Indoed drop to $62.50 a there, by the expiration date on the pues, Max will have a profit for foss) of 5 10,464,00 Hound to the newest cerit) b. In the stock kept going up in price wached 506.00 share by the expiration date, he would have a profit for 1s) of $26.600 Round to the rest cont)