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The current price of a non-dividend-paying stock is $41. Over the next year it is expected to rise to $52 or fall to $31. Assume
The current price of a non-dividend-paying stock is $41. Over the next year it is expected to rise to $52 or fall to $31. Assume the risk free rate is zero. An investor buys a put option with a strike price of $41. How would the investor hedge the put option position? Assume that the option is written on 100 shares of stock.
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