Question
You have purchased a put option on Kimberly Clark common stock. The option has an exercise price of $75 and Kimberly Clarks stock currently trades
You have purchased a put option on Kimberly Clark common stock. The option has an exercise price of $75 and Kimberly Clarks stock currently trades at $76.18. The option premium is $1.50 per contract. Assume that 100 shares are traded. |
a. | Calculate your net profit on the option if Kimberly Clarks stock price falls to $73 and you exercise the option. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations.) |
Net profit | $ |
b. | Calculate your net profit on the option if Kimberly Clarks stock price does not change over the life of the option. (Negative amount should be indicated by a minus sign.) |
Net profit | $ |
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