You have purchased 100 shares of Apple Inc. stock and plan to hold them until June 2020. You set up a bottom line in the investment: you dont want to lose more than $20 per share and you decide to use options to realize the goal.

1. On Nov 22, 2019, you go to Nasdaq (www.nasdaq.com) to look for the options that mature in June 2020. The information is in the excel file attached.

2. What is the current stock price of Apple Inc. on Nov 22, 2019? (1 point)

3. You decide to use the protective put strategy to achieve your goal. Briefly describe whats protective put strategy? (1 point)

4. Create an excel table in the format given to you to calculate the profits of protective put using each of the option available (use the last price as the price of the option). (5 points)

5. How will you construct your portfolio? Which option will you choose and why? (1 points)

6. Draw the graph of the profit of your portfolio with options you selected. (2 points)

A G H I J K L M N O P Q R 1 Company 2 Apple Inc. Bc D Symbol Last Sale AAPL $261.87 E F Change Net / % 0.09 0.03% 3 Ask Chg Ask 11 4. Option Chain for Apple Inc. (AAPL) 5 Calls 6 19-Jun-20 7 19-Jun-20 8 19-Jun-20 9 19-Jun-20 10 19-Jun-20 11 19-Jun-20 12 Last 34.01 29.97 27 21.44 16.6 12.3 Vol 156 66 Chg -0.23 -0.73 -0.24 -0.47 -0.15 -0.25 Bid 33 29.2 24.85 21 Vol 150 10 181 Open Int Root 3864 AAPL 3282 AAPL 8941 AAPL 4714 AAPL 5588 AAPL 5730 AAPL 35.2 31.7 28.55 22.4 16.95 12.65 Strike 240 245 250 260 270 Puts Last 19-Jun-20 10.65 19-Jun-20 12 19-Jun-20 14.5 19-Jun-20 18.49 19-Jun-20 23.55 19-Jun-20 28.34 |-0.15 -0.45 0.25 0.14 0 Bid 10.65 10.65 13.25 18 22.95 28.45 74 Open Int 2233 1159 1818 1270 737 13 15.85 18.65 24.25 30.75 87 131 16.1 12.1 116 401 280 191 A G H I J K L M N O P Q R 1 Company 2 Apple Inc. Bc D Symbol Last Sale AAPL $261.87 E F Change Net / % 0.09 0.03% 3 Ask Chg Ask 11 4. Option Chain for Apple Inc. (AAPL) 5 Calls 6 19-Jun-20 7 19-Jun-20 8 19-Jun-20 9 19-Jun-20 10 19-Jun-20 11 19-Jun-20 12 Last 34.01 29.97 27 21.44 16.6 12.3 Vol 156 66 Chg -0.23 -0.73 -0.24 -0.47 -0.15 -0.25 Bid 33 29.2 24.85 21 Vol 150 10 181 Open Int Root 3864 AAPL 3282 AAPL 8941 AAPL 4714 AAPL 5588 AAPL 5730 AAPL 35.2 31.7 28.55 22.4 16.95 12.65 Strike 240 245 250 260 270 Puts Last 19-Jun-20 10.65 19-Jun-20 12 19-Jun-20 14.5 19-Jun-20 18.49 19-Jun-20 23.55 19-Jun-20 28.34 |-0.15 -0.45 0.25 0.14 0 Bid 10.65 10.65 13.25 18 22.95 28.45 74 Open Int 2233 1159 1818 1270 737 13 15.85 18.65 24.25 30.75 87 131 16.1 12.1 116 401 280 191