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Required information On May 1, 2022, a company purchased a put option on shares of RMH stock for speculative purposes. The contract was for
Required information On May 1, 2022, a company purchased a put option on shares of RMH stock for speculative purposes. The contract was for 100 shares at a strike price of $100 per share, with an expiration date of July 31, 2022. The company settled the option on July 11 (assume cash settlement). Additional information pertaining to the option is provided below. Price per share of stock: Time value of option: May 1 $100 $60 June 30 $82 $49 Use the information above to answer the questions below. Compute the cost of the option paid by the company on May 1. Cost of option: July 11 $90 $42
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