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The current price of a non-dividend-paying stock is $40. Over the next six months it is expected to rise to $42 or fall to $37.
The current price of a non-dividend-paying stock is $40. Over the next six months it is expected to rise to $42 or fall to $37. Assume the risk-free rate is zero. An investor buys put options with a strike price of $41. Which of the following hedges the position?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
