Problem 28-02

A put is the option to sell stock at $49. It expires after three months and currently sells for $5 when the price of the stock is $51.

1. If an investor buys this put, what will the profit be after three months if the price of the stock is $55? $49? $43? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0".

   Price of the stock	Profit on the position in the put
   $55	$
   $49	$
   $43	$

2. What will be the profit from selling this put after three months if the price of the stock is $55? $49? $43? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0".

   Price of the stock	Profit on the position in the put
   $55	$
   $49	$
   $43	$