Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 80.28 sometime during the next 5 months.

Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 80.28 sometime during the next 5 months. For $ 1,424.19 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $ 87 per share. If you bought a 100-share contract for $ 1,424.19 and Du Pont's stock price actually changed to $ 65.48 , your net profit (or loss) after exercising the option would be ______? Show your answer to the nearest .01. Do not use $ or , signs in your answer. Use a - sign if you lose money on the contract.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance A Contemporary Application Of Theory To Policy

Authors: David N Hyman

8th Edition

0324259700, 978-0324259704

More Books

Students also viewed these Finance questions

Question

Outline the four basic components of drives according to Freud.

Answered: 1 week ago

Question

6. Explain what causes unsafe acts.

Answered: 1 week ago