Question
Suppose you have short position in 100 shares of Microsoft stock, ticker MSFT. You plan to close out the position in July 2018 and want
Suppose you have short position in 100 shares of Microsoft stock, ticker MSFT. You plan to close out the position in July 2018 and want to limit the cost of the closeout to no more than $95 per share. You do not want to use a forward contract.
a) What option would you purchase to guarantee this outcome?
b) How much would it cost? Explain how you got your answer.
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Financial Accounting An Introduction To Concepts Methods And Uses
Authors: Sidney Davidson, Roman L. Weil, Clyde P. Stickney
2nd Edition
0030452961, 978-0030452963
