Question
Suppose you believe that ABC Inc.'s stock price is going to decline sometime during the next 6 months. For $500 you could buy a 6-month
Suppose you believe that ABC Inc.'s stock price is going to decline sometime during the next 6 months. For $500 you could buy a 6-month put option giving you the right to sell 100 shares at a price of $50.00 per share. If you bought a 100-share contract for $500 and ABC Inc.'s stock price actually dropped to $40.00, you would make (net payoff).
a.$2,000
b.$1,500
c.$1,000
d.$500
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Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter
8th Canadian Edition
007133887X, 978-0071338875
