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Suppose you believe that Florio Company's stock price is going to decline from its current level of $82.50 sometime during the next 5 months. For
Suppose you believe that Florio Company's stock price is going to decline from its current level of $82.50 sometime during the next 5 months. For $5.10 you could buy a 5-month put option giving you the right to sell 1 share at a price of $85 per share. If you bought this option for $5.10 and Florio's stock price actually dropped to $65, what would your pre-tax net profit be? a. -$5.10 O b. $24.90 C. $19.90 O d. $27.60 e. $14.90
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