Question
On December 21, 2020, you purchased 100 shares of ABC company at $11 per share. You plan to sell your shares on December 21, 2021
On December 21, 2020, you purchased 100 shares of ABC company at $11 per share. You plan to sell your shares on December 21, 2021 and are concerned about downside risk. A put option on ABC stock with an exercise price (K) of $40 is currently priced (P) at $2 per share. Also, two call options on ABC stock with exercise prices (K) of $40 and $65 are priced (C) at $2.5 and $1.50 per share, respectively. All options expire on December 21, 2021. What will be net profit/loss per share on a long put if the stock price is $55 per share?
| A. | $18 | |
| B. | $28 | |
| C. | -$2.0 | |
| D. | $22 |
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Financial and Managerial Accounting Using Excel for Success
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
1st edition
978-1111993979
