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Part $1$

You own a put option on Ford stock with a strike price of $ $8.$ The option will expire in exactly six$$ months' time.$$

a$.$ If the stock is trading at $ $7$ in six$$ months, what will be the payoff of the$$ put?

b$.$ If the stock is trading at $ $23$ in six$$ months, what will be the payoff of the$$ put?

c$.$ Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration.