Question
You have purchased a put option on Pfizer common stock. The option has an exercise price of $43 and Pfizers stock currently trades at $45.
You have purchased a put option on Pfizer common stock. The option has an exercise price of $43 and Pfizers stock currently trades at $45. The option premium is $0.40 per contract. |
a. | What is your net profit on the option if Pfizers stock price does not change over the life of the option?(Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) |
Net profit | $ per share |
b. | What is your net profit on the option if Pfizers stock price falls to $39 and you exercise the option?(Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) |
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