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Suppose the current price of a stock is $ 1 1 4 and you buy 1 0 contracts of an August put option with a

Suppose the current price of a stock is $

114

and you buy

10

contracts of an August put option with a strike price of $

110

and at a premium of $

4.70 .

Each contract is for

100

shares. What is your maximum possible gain? On expiration the stock is selling for $

104 .

How much is your options investment worth. What is your net gain?

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