Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

You have written a put option on Diebold Inc. common stock. The option has an exercise price of $42 and Diebold's stock currently trades at

image text in transcribed

You have written a put option on Diebold Inc. common stock. The option has an exercise price of $42 and Diebold's stock currently trades at $44.50. The option premium is $.75 per contract. a. What is your net profit if Diebold's stock price increases to $46 and stays there until the option expires? b. What is your net profit on the option if Diebold's stock price decreases to $39 at expiration of the option and the option holder exercises the option? (For all requirements, negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) Net profit Net profit per share per share b

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions