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Problem 7. The current stock price of Ford (F) is $16.95 per share. You enter a long position in put options on Ford that strike
Problem 7. The current stock price of Ford (F) is $16.95 per share. You enter a long position in put options on Ford that strike at 15 and mature in exactly one year. The premium of the option is $1. The one-year interest rate (simple compounding) is 5%. The Ford price that makes the position break-even in a year is closest to (a) $15.00 per share. (b) $16.05 per share. (c) $13.95 per share. (d) $14.00 per share. Problem 8. You enter the position in put options on AAPL that strike at 425 and mature in exactly one year. The premium of the option is $40. The one-year interest rate (simple com- pounding) is 5%. The AAPL price that makes the position break-even in a year is closest to (a) 385 dollars per share. (b) 383 dollars per share. (c) 467 dollars per share. (d) 465 dollars per share
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