It is September 13, 2012, and you own IBM stock. You would like to insure that the value of your holdings will not fall significantly. Using the data in Problem 3, and expressing your answer in terms of a percentage of the current value of your portfolio:
a. What will it cost to insure that the value of your holdings will not fall below $200 per share between now and the third Friday in September?
b. What will it cost to insure that the value of your holdings will not fall below $200 per share between now and the third Friday in October?
c. What will it cost to insure that the value of your holdings will not fall below $205 per share between now and the third Friday in October?