Question

Draw a profit or loss graph (similar to figure) for a put contract with an exercise price of $45 for which a $5 premium is paid. You may assume that the option is being evaluated on its expiration date. Identify the break-even price of the underlying stock. What are the maximum losses the holder of the option might experience, and what are the maximum gains?



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  • CreatedOctober 31, 2014
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