You have purchased 3000 shares of Green Bank long time ago at a fairly low price. Now the stock is trading at Rs. 2550 per share and you are concerned about preserving the gains that this stock has made so far. Your investment advisor suggests you to make use of a protective put. Heeding his advice, you buy a 2500 put option on Green bank at Rs.85, expiring in 3 months. a) Is this a good strategy? b) Identify two ways in which you can bring down the cost of the above strategy, based on the data below. State the cashflows in detail for each, if Green Bank ends up at (i) Rs 2400 (ii) Rs. 2650 c) Which of the cost reduction methods will you prefer? Why? Option prices for Green Bank {3 months expiry) Call premium Strike Put premium 242 51 175 2500 85 125 132