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You own a put option on Ford stock with a strike price of $15. When you bought the put, its cost to you was $4.

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You own a put option on Ford stock with a strike price of $15. When you bought the put, its cost to you was $4. The option will expire in exactly six months' time. a. If the stock is trading at $11 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six months, what will be the payoff of the put? What will be the profit of the put? c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. .... a a. The payoff of the put is $, and the profit of the put is $ (Round to the nearest dollar.) b. The payoff of the put is $, and the profit of the put is $ (Round to the nearest dollar.) c. Choose the correct diagram below. . OB. a 20- 10 Q 10- 0 Value of the Put ($) 10.20 20 30 40 50 60 10 20 30 40 50 60 -10- -20- -20 Stock Price at Expiration (S) 5 Stock Price at Expiration (S) . OD. 203 20- 10- Q 10-1 06 Value of the Put ($) 0 10 20 30 40 50 60 10 20 30 40 50 60 -10-1 -10 -20- Stock Price at Expiration (S) Stock Price at Expiration (S) 5 d. Choose the correct diagram below. . a . 20- 20 10- 10- Profit of the Put ($) 0 0- 10 10 20 -10-1 -10 203 Stock Price at Expiration (S) Stock Price at Expiration

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